The EUR/USD USD pair remains within its established technical boundaries, likely to maintain its sideways movement until significant volatility drivers come into play.
Possible technical scenarios:
EUR/USD quotes are currently trading near the support at 1.0801. If this level holds, we may witness a rebound towards the 1.0888 resistance. However, if the support at 1.0801 is broken out, the next downward target would be around the horizontal at 1.0749.
Fundamental drivers of volatility:
The euro's performance in the pair will be affected this week by the European Central Bank's rhetoric, with the meeting outcomes scheduled to be announced on Thursday at 2:15 p.m. GMT. The main interest rate is anticipated to remain steady at 4.50%, hence the significance of the ECB's messaging.
A press conference by the ECB will follow at 2:45 p.m. GMT, with ECB Chair Christine Lagarde expected to speak at 4:00 p.m. GMT. Additionally, Federal Reserve Chair Powell's address to US legislators on Wednesday and Thursday at 4:00 p.m. GMT will be pivotal from the US perspective.
Furthermore, on Friday at 1:30 p.m. GMT, the release of the US labor market report is anticipated, typically triggering heightened volatility in the US currency. Projections suggest a decline in year-over-year average hourly wage growth from 4.5% to 4.4%, and a monthly decrease from 0.6% to 0.2%. Additionally, the change in the number of employed individuals in the non-agricultural sector (Nonfarm Payrolls) is expected to be 190 thousand, compared to 353 thousand in January, with unemployment likely to remain steady at 3.7%.
Intraday technical picture:
Judging by the unfolding situation on the 4H chart of the EUR/USD pair, we observe consolidation around the support at 1.0801. While a recovery from this level is not ruled out, there's also the possibility of its breakout and further decline towards the target of 1.0749.
The GBP/USD pair is staging a recovery amidst sustained pressure on the dollar this week, ahead of significant developments anticipated from the US.
Potential technical scenarios:
As we can observe on the daily chart, GBP/USD has surpassed the 1.2656 level, paving the way for a potential advance towards the resistance at 1.2792, with enough room for further movement.
Fundamental drivers of volatility:
This week, the dollar's performance in the pair is poised to be influenced by Fed Chair Powell's address to US lawmakers on Wednesday and Thursday at 4:00 p.m. GMT.
Additionally, market attention will be on the release of the U.S labor market report on Friday at 1:30 p.m. GMT, typically sparking heightened volatility in the US currency. Projections suggest a decrease in annual growth of average hourly wages from 4.5% to 4.4%, along with a decline in monthly growth from 0.6% to 0.2%.
Moreover, the change in non-farm payrolls is anticipated to be 190 thousand, compared to 353 thousand in January, while the unemployment rate is forecasted to remain steady at 3.7%.
Intraday technical picture:
According to the 4H chart of the GBP/USD, consolidation above the highs from last week sets the stage for potential growth towards the 1.2792 level, with sufficient room for price movement.
The USD/JPY pair remains in a consolidation phase, hovering between a subdued yen and a weakening US dollar. The price is close to a psychological boundary, historically associated with currency interventions.
Possible technical scenarios:
Based on the daily chart of USD/JPY, the pair continues to trade near the 150.17 level, lacking clear consolidation either above or below. An exit from this range may occur during the current week, influenced by developments from the United States.
Fundamental drivers of volatility:
The Japanese yen demonstrates muted responsiveness to discussions surrounding potential tightening of the central bank's monetary policy since April, thus the pair's dynamics are chiefly influenced by dollar volatility.
From the US perspective, the upcoming speech by Federal Reserve Chair Jerome Powell before the nation's lawmakers holds significant importance. This event is scheduled for Wednesday and Thursday at 4:00 p.m. GMT.
Additionally, market focus will be on the release of the US labor market report on Friday at 1:30 p.m. GMT, which typically prompts increased volatility in the US currency. Projections indicate a decrease in annual average hourly earnings growth from 4.5% to 4.4%, alongside a decline in monthly growth from 0.6% to 0.2%. The change in non-farm payrolls is anticipated to be 190 thousand, compared to January's 353 thousand, with the unemployment rate expected to remain at 3.7%.
Intraday technical picture:
Judging by the unfolding situation on the 4H chart of the USD/JPY pair, the price has descended to the support of the dotted range between 149.46 and 150.88. Failure to break it out and sustain below this level may lead to a price recovery towards its resistance.
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