Latest Data Supporting for FED PAUSE

USD Tight range ahead of FOMC: The dollar range traded against the euro but softened versus the yen ahead of today's FOMC meeting.
EURUSD traded a tight 1.2666 - 1.2691 range, while USDJPY shrugged off political concerns in South East Asia and a plummeting Nikkei, drifting lower to trade a 117.67 - 117.20 range.

Another weak US housing number appears largely responsible for overnight price action ahead of today Fed meeting. Indeed August's 6% housing start slump to 1.655 mln (well below market consensus of 1.75 mln), when combined with yesterday's fall in core goods PPI, will likely prove more than sufficient to keeps Fed hawks at bay until at least the middle of next month.

More confident FOMC language today: With latest data supporting the Fed's pause, the language of today's FOMC should be slightly more confident that rates will be kept on hold for now.
Thus despite recent softness, we continue to favour a range-break to the topside in EURUSD in the relatively near-term as the USD carry advantage continues to erode steadily, and we suspect financing conditions will become less favorable in the weeks ahead.

The FOMC meets at 1300 GMT, decision expected to be announced at 1815 GMT.