After data from Germany showed growing recession fears, the EUR/USD pair is recovering losses from the end of last week while market players wait for remarks from the president of the ECB, Christine Lagarde.
Possible technical scenarios:
The EUR/USD pair is putting the resistance at 1.0958, below which it was falling last week, to the test. If the price manages to overcome this level and consolidate above it, the next target for recovery will be the resistance at 1.1075 marked with dotted lines.
Fundamental drivers of volatility:
The statements made by the leaders of the world's central banks are expected to be the most significant potential sources of volatility in the pair during the first part of the week.
Both the President of the European Central Bank, Christine Lagarde, and the Chair of the Federal Reserve, Jerome Powell, will speak on Wednesday at 12:30 PM GMT.
Christine Lagarde, the President of the European Central Bank, is scheduled to give another speech at 3:00 PM GMT.
Intraday technical picture:
As we can see on the 4H chart of the EUR/USD pair, as of right now, there is no obvious consolidation above 1.0958. In the event that it does occur, the pair will need to overcome the highs from June 22 in order to continue climbing toward 1.1075. A return to the previous week’s lows is an alternate scenario that could play out if the price fails to consolidate above the goal of 1.0958.
Last week, the pound sterling fell because the market players worried that a rate hike by the Bank of England would increase the likelihood of a recession. The decline in the value of the US dollar this week, however, has halted the pair's recent decline.
Possible technical scenarios:
The daily chart shows the GBP/USD pair trading in the middle of its range between 1.2601 and 1.2785. The update of last week's lows will let quotes continue moving south.
Fundamental drivers of volatility:
The markets are currently concentrating their attention on the speeches that will be given by the governors of central banks on Wednesday. Both the Governor of the Bank of England, Andrew Bailey, and the Chairman of the Federal Reserve, Jerome Powell, will speak simultaneously at 12:30 PM GMT.
Investors will be listening closely to their speech in hopes of picking up any signals about forthcoming monetary policy initiatives.
Intraday technical picture:
As evidenced by the 4H chart of the GBP/USD chart, we are witnessing local support at 1.2694 that is forming in the middle of a sideways range between 1.2601 and 1.2785. If this local horizontal line continues to hold, there is a chance that the price will recover. A breakout of the 1.2694 level and consolidation below it will open the door to thsupport at 1.2601.
The AUD/USD pair gave up all of its recent gains and returned back into the wide range it has been trading since February. Presently, the quotes are halfway to its support.
Possible technical scenarios:
As we can see on the daily chart, the AUD/USD quotes returned below the resistance at 0.6798 and traveled to the support at 0.6669. If the price is able to overcome this boundary, the next goal to the south will be support at 0.6567 marked with dotted lines.
Fundamental drivers of volatility:
Australia is not likely to release any substantial macroeconomic news this week. The pair's movement will be determined mostly by the volatility of the US dollar. The U.S. dollar will be sensitive to comments made by the Chair of the Federal Reserve Jerome Powell, as market players will be listening for clues of future monetary policy shifts.
The Fed Chairman is scheduled to speak this week at 12:30 PM and 6:30 AM GMT on Wednesday and Thursday, respectively.
The Q1 GDP figures for the United States will be released on Thursday at 12:30 PM GMT. Compared to the prior forecast of 1.3%, economists now anticipate GDP growth QoQ of 1.4%.
Intraday technical picture:
Judging by the look of things on the 4H of the AUD/USD pair, we can see that the price is being held back by the support at 0.6669 at the moment. A local upward correction is likely, with 0.6798 continuing to act as a resistance. After the pair has consolidated below the 0.6669 level, we may anticipate price declines.
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