The EUR/USD pair has been in a consolidation phase throughout October. This movement is part of a local upward trend, indicating lingering market uncertainty.
Possible technical scenarios:
Judging by the unfolding situation on the daily chart of the EUR/USD pair, we observed a decline on Tuesday due to disappointing euro area data, signaling a slowdown in economic growth. That being said, if the 1.0592 level holds, there could be a continuation of the upward movement toward the nearest resistance at 1.0707 marked with dotted lines.
Factors contributing to volatility:
Euro area figures on Tuesday revealed decelerating inflation and weaker-than-expected third-quarter GDP growth, which put pressure on the Euro. Market players are keeping a close eye on the Federal Reserve's statements during Wednesday's meeting and the release of employment data later in the week. A reaction in the US dollar may occur in response to the ADP employment report for October, scheduled for release at 12:15 p.m. (GMT). The key focus remains on the Fed meeting, with the interest rate decision (expected to remain at 5.50%) to be announced at 6:00 p.m. (GMT). Investors will closely watch Federal Reserve Chair Powell's remarks at 6:30 p.m. (GMT).
Intraday technical picture:
As we can see on the 4H chart, the EUR/USD pair's continued upward trend remains. Despite a local pullback, there is technical room for prices to reach the trend resistance around the horizontal level of 1.0707 marked with dotted lines. That being said, it's essential to consider upcoming macroeconomic stats from the US, which could influence any adjustments in the technical benchmarks.
The GBP/USD pair is currently experiencing a narrowing trading range. Both central banks are scheduled for meetings this week, and while no rate changes are expected, the tone of their statements could offer insights into the pair's future direction.
Possible technical scenarios:
Examining the daily timeframe of the GBP/USD pair, it’s evident that the pair is trading within a narrowing range beneath the resistance of a downward channel. The dotted level at 1.2110 serves as local support, and its breakout would pave the way for a decline towards support at 1.1934.
Fundamental drivers of volatility:
The key event affecting the pound's dynamics in this pair for the week will be the Bank of England's meeting results, scheduled for Thursday at 12:00 p.m. (GMT). The central bank is not expected to hike the interest rate from its current level of 5.25%. So, market players will scrutinize the tone of the minutes from the Monetary Policy Committee meeting and the remarks of Bank of England’s Governor Andrew Bailey, who is set to speak at 2:15 p.m. (GMT). Traders will also look for clues in the statements to figure out whether the cycle of monetary policy tightening has ended.
On the other hand, the US dollar's performance will be sensitive to employment data starting Wednesday (ADP report) and the Federal Reserve's decisions. The Federal Reserve's meeting results are expected on Wednesday at 6:00 p.m. (GMT), with no expected change to the current 5.50% interest rate. The focus will shift to the FOMC statement and Federal Reserve Chairman Powell's speech at 6:30 p.m. (GMT).
Intraday technical picture:
Based on the 4H chart of the GBP/USD pair, it becomes evident that there is another downward bounce from the resistance of the downtrend. A consolidation below the dotted support at 1.1934 would likely prompt further downward movement. However, the market is anticipated to gain more clarity regarding technical benchmarks and the pair's direction after the central bank meetings.
The AUD/USD pair continues to consolidate while adhering to its long-term downward trend, reflecting ongoing market uncertainty. This is further confirmed by the sideways movement of the US dollar observed throughout October.
Possible technical scenarios:
Taking a closer look at the daily chart, we can see that the technical landscape of the AUD/USD pair hasn't experienced significant changes. The quotes remain within the three-month-long downward trend below the intermediate dotted resistance level at 0.6364 and support at 0.6255.
Fundamental drivers of volatility:
The pair's current dynamics are primarily influenced by the US dollar and shifts in risk sentiment.
The US currency will be particularly sensitive to the decisions made by the Federal Reserve during its meeting this week and the various labor market reports, with the most significant one anticipated on Friday.
While it's not expected that the Fed will adjust interest rates during this meeting, the market will closely monitor the speeches of the Federal Reserve Chair Powell for insights into whether another rate hike is on the horizon or if the monetary policy tightening cycle has ended.
Aside from that, the Nonfarm Payrolls figures scheduled for Friday will offer clarity regarding the labor market's strength and further rate-related prospects. These factors will shape market expectations and have an impact on the direction of the US dollar within the pair.
Intraday technical picture:
The 4H chart of the AUD/USD pair reveals a kind of sideways movement between two dotted lines at 0.6286 and 0.6364. A reversal from the upper boundary sets the technical conditions for a potential decline to the October lows.
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