Strong data feeding expectations for yet another Fed rate hike has sent the US dollar higher this week, putting further downward pressure on the EUR/USD pair.
Possible technical scenarios:
Within the context of an uptrend in the longer term, the daily chart of the EUR/USD pair shows that the pair's downward momentum is continuing. In addition, the pair is still halfway to the support of the range between 0.0808 and 1.0958.
Fundamental drivers of volatility:
The US economy may be able to avert a recession, according to the US figures released this week, as retail sales increased more rapidly than projected. The published FOMC minutes gave investors more confidence that the Fed would keep raising rates, which boosted the value of the US currency. To confirm or disprove these assumptions, market players will be keeping an eye on the data that will be provided prior to the Fed's meeting in September.
Intraday technical picture:
The trend to the south continues accompanied by pullbacks as can be seen on the 4H chart of the EUR/USD pair. Despite this, the weakening continues, and the pair still has some room to travel to support at 1.0808.
The pound's recent gains versus the US dollar have met resistance, suggesting further declines are possible if no major economic data is released before the week's end.
Possible technical scenarios:
As evidenced by the daily chart, the GBP/USD pair has hit the resistance of the sideways range between 1.2601 and 1.2785. From a technical standpoint, we may expect either a downward reversal or an attempt to break out 1.2785 and consolidate above, both of which would clear the way for the next objective at 1.2957.
Fundamental drivers of volatility:
This week, the strength of the pound was bolstered by statistics from the UK. However, the strength of the United States dollar was another factor that contributed to the sideways movement of the price. Because the United States and the United Kingdom are not expected to release any big volatility catalysts until the end of this week and early the next, GBP/USD volatility may continue to be muted.
Intraday technical picture:
As evidenced by the 4H chart, the GBP/USD pair is reversing from 1.2785 down having a small room for movement toward the support at 1.2683 marked with dotted lines. The price’s future movement will be determined by whether or not it can maintain its position above the horizontal line at 1.2683. A top-to-bottom breakout would signal a decline toward the 1.2601 support level.
This week, the US dollar has strengthened against the backdrop of the disparity between the ultra-soft monetary policies of the Federal Reserve and the Bank of Japan, leading to a rise in the value of the USD/JPY currency pair.
Possible technical scenarios:
The daily chart shows that the USD/JPY broke out the resistance at 144.98 and consolidated above it. A pullback to this level from above may confirm it as support, letting the pair return to this week's highs or reach 146.92.
Fundamental drivers of volatility:
This week, market players have been focusing on the Japanese yen because of the currency's decline against the US dollar. The dollar's value against the yen increased to over 145 yen, a level at which the Bank of Japan intervened last autumn. As a result, the possibility of market intervention by the central bank persists over this threshold.
Intraday technical picture:
Judging by the look of things on the 4H chart, the USD/JPY pair is attempting to retreat upwards from 144.98, which may point to further recovery. In the event of a probable intervention, a breakout of this level from top to bottom might lead to a drop toward 143 yen per dollar.
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