In light of the recent strength in the US dollar, the EUR/USD pair has been steadily falling this week.
Possible technical scenarios:
The daily chart demonstrates that the EUR/USD quotes are currently trading above the support at 1.0958. Consolidation below the support at 1.0933, which would clear the way for the price to move toward 1.0808, will be a sign of further decline. An additional possibility from a technical standpoint is that the pair will recover within the range of 1.0958 to 1.1121.
Fundamental drivers of volatility:
The PMI indices for the manufacturing and services sectors in the euro area are expected this week. US employment stats, due out on Wednesday and Friday, however, will be the primary factor affecting the pair.
The ADP employment report for July in the United States non-farm sector is scheduled for release on Wednesday at 12:15 PM GMT. The estimate is 188,000, down from June's actual high of 497,000. The US dollar's volatility in the pair is likely to rise if actual data turns out to be higher or lower than expected.
Intraday technical picture:
As we can see on the 4H chart of the EUR/USD pair, the price is going back to the support at 1.0958 following a pullback. The strength of this level may be put to the test again. If it gets broken out and the price consolidates below it, the support at 1.0833 marked with dotted lines could be the next target to the south.
This week, the GBP/USD pair has been trending lower in anticipation of major fundamental drivers. It is possible that the market's response to the meeting of the Bank of England and the US employment report will cause prices to move in a different direction.
Possible technical scenarios:
As evidenced by the daily chart, the GBP/USD pair continues to trade near the support at 1.2785. If it is broken out, the next target to the south will be a horizontal line of 1.2600. Otherwise, a recovery toward the resistance at 1.2957 is possible.
Fundamental drivers of volatility:
In the first half of the week, the pair's movement will be determined by US employment figures. At 12:15 PM GMT on Wednesday, the ADP agency is scheduled to release data showing an increase in US non-farm employment to 188 thousand from 497 thousand in the previous month.
The findings of the Bank of England meeting, at which a hike in the main interest rate from 5.00% to 5.25% is anticipated, will be released on Thursday at 11:00 AM GMT.
Simultaneously, the minutes from the Monetary Policy Committee meeting will be made public, and at 11:30 AM GMT, Andrew Bailey, Governor of the Bank of England, will hold a press conference.
Intraday technical picture:
As seen on the 4H chart of the GBP/USD pair, the conditions are present for an attempt to test the strength of support at 1.2785, it makes sense to hold off on making any long-term plans until the pair’s position in relation to this horizontal line is clear.
As a result of the Reserve Bank of Australia's decision not to hike the basic interest rate on Tuesday, the AUD/USD pair is currently declining within a wide multi-month sideways range.
Possible technical scenarios:
The AUD/USD pair is approaching the support of a wide corridor between 0.6567 and 0.6893 marked with green dotted lines. At the same time, the pair has enough room to move toward its lower border.
Fundamental drivers of volatility:
The Australian dollar came under pressure on Tuesday after the Reserve Bank of Australia decided not to hike the basic interest rate. Given the pair's sideways dynamics, AUD/USD may drop to the corridor's lower boundary or even to May's lows against this backdrop.
The US employment report, which generally affects the dynamics of the US currency, will be the week's second major driver of volatility. While the official numbers will be revealed on Friday at 12:30 PM GMT, ADP will release their report on Wednesday.
Intraday technical picture:
The AUD/USD pair is attempting to break above the lows that were reached on July 28, as shown by the chart for the 4H chart. This will make it possible for the price to continue falling, with the lows of June 29 and July 6 being the most likely objectives for it at this point.
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