The EUR/USD pair rose early this week amid a continued weakening of the U.S. currency. Owing to expectations that the European Central Bank may be forced to hike interest rates by 50 basis points at its next week’s meeting, the euro also received a boost.
Possible technical scenarios:
As evidenced by the daily chart, EUR/USD quotes are putting the strength of the resistance at 1.1032 to the test. If the price consolidates above it, we can expect the price to continue rising toward the nearest target at 1.1121. Otherwise, the price may return to the range between 1.0930 and 1.1032 marked with green dotted lines.
Fundamental drivers of volatility:
The dynamics of the euro in the pair in the first half of the week may intensify following the release of German critical data, while the U.S. dollar will be sensitive to American macroeconomic statistics. Both reports will be released on Wednesday.
The GfK Consumer Climate Indicator for the month of May is expected at 6:00 am GMT and projected at -27.9 against -29.5 earlier.
Core Durable Goods Orders in the United States will be released at 12:30 pm GMT with the expected 0.2% drop in March compared to the 0.1% decline earlier. In the meantime, the U.S. Durable Goods Orders are expected to rise by 0.7% in the month of March against the 1.0% decline previously.
Intraday technical picture:
Judging from the 4H EUR/USD chart, it is yet unclear whether the breakout of the 1.1032 resistance level was true or false. If the current pullback toward it gets confirmed as support, we may expect further price recovery toward the new resistance at 1.1121.
In anticipation of the Fed meeting, the decline in the U.S. dollar creates prerequisites for the GBP/USD recovery within the April sideways corridor.
Possible technical scenarios:
As we can see in the daily chart, the GBP/USD pair is approaching the upper boundary of the sideways range between 1.2343 and 1.2525 marked with green dotted lines. From the 1.2525 area, a downward reversal is likely. Otherwise, if the price breaks it out and consolidates above it, the price may climb to the next target at 1.2601.
Fundamental drivers of volatility:
As we approach next week's Fed meeting, market players will be keeping a close eye on macroeconomic stats from the United States to understand the prospects for future interest rate hikes.
In this context, the volatility of the U.S. dollar in the pair may increase if the actual figures turn out to be higher or lower than expected.
On Wednesday, the investors will focus on Core Durable Goods Orders in the United States to be released at 12:30 pm GMT. We are expecting a 0.2% decline month-over-month as compared to a 0.1% drop previously. In the meantime, the forecast says that the volume of Durable Goods Orders in March will rise 0.7% against the previous decline totaling 1.0%.
Intraday technical picture:
As can be seen in the 4H chart of the GBP/USD pair, the price has a small room to move to the resistance at 1.2525. Following a local pullback, the pair may start rising again.
While maintaining a sideways trend in the medium term, the AUD/USD pair has remained under pressure since last week. If the following dynamic is still there, the price may reverse upwards after reaching the lower boundary of the range.
Possible technical scenarios:
AUD/USD quotes are approaching the support at 0.6631 marked with dotted lines. If it manages to stop the price, the pair may proceed to recover, with resistance at 0.6798 serving as the growth target. A continued decline towards 0.6567 which is a lower level marked with green dotted lines can be an alternative scenario.
Fundamental drivers of volatility:
The U.S. statistics will be affecting the behavior of the pair in the first half of the week.
Core Durable Goods Orders in the United States released on Wednesday at 12:30 pm GMT will act as one of the leading inflation indicators.
The figures month-over-months are projected at -0.2% compared to -0.1% previously. In the meantime, we are expecting a 0.7% increase in the volume of durable goods orders against the 1.0% decline previously.
Intraday technical picture:
The 4H chart of AUD/USD suggests that the pair still has some room to move toward support at 0.6631. The further price behavior will depend on whether this level stops the price or not.
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