The uptick in the EUR/USD pair stems from the decline in the US dollar's value this week. However, this trend could be reaffirmed or reversed upon the release of fresh data on the US labor market, providing clarity on interest rate prospects.
Possible technical scenarios:
The EUR/USD pair has reached the midpoint of the sideways range between 1.0801 and 1.0888, presenting the possibility of a technical movement toward either boundary.
Fundamental drivers of volatility:
This week, the dollar dipped to a two-week low on Thursday, fueled by economic indicators reinforcing speculations of imminent US interest rate cuts. Yet, the US currency rebounded from previous losses, particularly after remarks by the president and CEO of the Federal Reserve Bank of Minneapolis suggesting rate cuts may not be necessary if inflation decelerates.
The highlight of the day, expected at 12:30 p.m. (GMT), is the release of the US labor market report, typically a catalyst for heightened volatility. Actual data often diverges from forecasts, prompting market reactions.
Forecasts anticipate a 0.3% increase in average hourly wages, up from the previous 0.1% rise. Nonfarm payrolls are expected to decrease to 212 thousand from the previous 275 thousand, while the unemployment rate is anticipated to hold steady at 3.9%.
Intraday technical picture:
As we can see on the 4H chart of the EUR/USD pair, today may resolve the price uncertainty within the range between 1.0801 and 1.0888, with movements dictated by the nature of incoming news from the United States.
The GBP/USD pair, having experienced an uptrend earlier in the week, has now stabilized in anticipation of crucial macroeconomic data that will provide clarity on its future trajectory.
Potential technical scenarios:
Judging by the look of the unfolding situation on the daily chart, the GBP/USD pair has entered a narrow range between 1.2608 and 1.2656. It may either sustain its upward momentum toward the 1.2792 level or retreat to the support at 1.2525.
Fundamental drivers of volatility:
This week, the pound received a boost from a weakened US dollar, which reached a two-week low by Thursday amidst speculations of impending US interest rate cuts fueled by supportive economic data. However, the US currency partially rebounded following remarks by the president and CEO of the Federal Reserve Bank of Minneapolis Neel Kashkari.
The pair's dynamics are poised to intensify today at 12:30 p.m. (GMT) with the release of the US labor market report, likely heightening volatility. Forecasts anticipate a 0.3% month-over-month increase in average hourly wages, an improvement from the previous 0.1%. Nonfarm payrolls are expected to decline to 212 thousand from the prior 275 thousand, while the unemployment rate is forecasted to remain at 3.9%.
Intraday technical picture:
According to the 4H chart, the GBP/USD is attempting to regain momentum within the corridor between 1.2608 and 1.2656. Amidst increased volatility in response to US dollar movements, the pair may experience directional shifts.
The AUD/USD pair experienced a recovery this week, buoyed by the weakening US dollar. Today, its trajectory will largely hinge on the response of the American currency to the employment report.
Possible technical scenarios:
As evidenced by the daily chart of the AUD/USD pair, the upward movement was halted by the dotted resistance level at 0.6619. Should this resistance be overcome, the next targets for upward movement lie at 0.6676 and 0.6777. If that scenario doesn’t play out, a retreat to the support level around 0.6498 remains a likely alternative scenario.
Fundamental drivers of volatility:
The pair's performance continues to be influenced by the volatility of the US dollar, which dipped to a one-week low this week following reports of an unexpected slowdown in US services growth. This bolstered expectations of potential interest rate cuts. However, the US dollar staged a modest recovery, buoyed by remarks from Fed member Neel Kashkari and anticipation of today's US labor market report, which will offer insights into future rate dynamics.
At 12:30 p.m. (GMT), data is anticipated to reveal a 0.3% month-over-month increase in average hourly wages, up from the previous 0.1%. Nonfarm payrolls are forecasted to decline to 212 thousand from the previous 275 thousand, while the unemployment rate is expected to remain steady at 3.9%.
Intraday technical picture:
According to the 4H chart of the AUD/USD pair, a reversal is observed from the dotted resistance at 0.6619. This technically sets the stage for a potential decline toward the support level at 0.6498. However, such dynamics may be subject to correction depending on the volatile reaction of the US currency to unfolding news.
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