The EUR/USD pair went up amid the U.S. dollar weakness against the currency basket. However, this week’s inflation reports and the decision of the European Central Bank regarding interest rate hike may affect the technical picture and further behavior of the quotes.
Possible technical scenarios:
On the daily chart, we can see that the EUR/USD pair went up from the 1.0535 - 1.0691 range of between the two green dotted lines. If 1.0691 manages to remain standing as support, the price may continue to go up to 1.0808.
Fundamental drivers of volatility:
On Thursday, the dynamics of the U.S. dollar in the pair will be affected by the retail sales figures for the month of February to be released at 12:30 pm GMT, along with U.S. Producer Price Index (PPI) which will make the inflation picture even clearer.
At the same time, the euro’s volatility may spike on Thursday following the announcement of the ECB meeting results and the rhetoric of Christine Lagarde, the president of the European Central Bank.
Intraday technical picture:
On the 4H chart of the EUR/USD pair, we can see confirmation of the 1.0691 level, i.e. upper green dotted line, as support. This, in turn, creates technical prerequisites for further increase to 1.0808. That being said, reaction of both currencies to the news releases may cause this scenario to change.
The U.S. dollar’s decline is supporting the GBP/USD pair this week. The dynamics of the U.S. currency in the coming days will depend on how the released macroeconomic stats from the United States will affect expectations regarding the Fed’s future rate hike.
Possible technical scenarios:
GBP/USD quotes went above 1.2146. If it manages to remain standing as support, the resistance at 1.2234 marked with dotted lines will serve as the next growth target. The return of the pair back into the 1.2077 - 1.2146 range could be an alternative scenario.
Fundamental drivers of volatility:
On Wednesday, the dollar’s volatility in the pair may increase in response to economic stats at 12:30 pm GMT. Retail sales are expected to demonstrated a contraction of 0.3% compared to a 3.0% increase in the previous period.
Aside from that, we are waiting for the release of the U.S. Producer Price Index (PPI) for the month of February. The Core Index is expected to decline from 0.5% to 0.4% and the PPI is expected to drop from 0.7% to 0.3%.
Intraday technical picture:
On the 4H chart of the GBP/USD pair, consolidation at 1.2146 support suggests further increase. However, it stands to mention that the response to macroeconomic data releases may alter technical forecasts.
The AUD/USD pair went up amid a sharp weakening of the U.S. dollar on Friday and Monday following a weak labor market report and the Sillicon Valley Bank’s crash. This week’s price behavior will depend chiefly on how the U.S. dollar reacts to the upcoming macroeconomic stats starting with inflation figures on Tuesday and the retail sales.
Possible technical scenarios:
On the daily chart, we see that the increase in the AUD/USD pair was stopped by the 0.6669 level. In case of the breakout of this level and consolidation above it, the pair will be able to continue strengthening towards the medium-term target at 0.6798. A return to the 0.6547 support which is the lower green dotted line could be an alternative scenario.
Fundamental drivers of volatility:
The key volatility catalysts for AUD/USD are expected on Wednesday and Thursday.
The U.S. retail sales figures for the month of February and the U.S. Producer Price Index (PPI) will be released on Wednesday at 12:30 pm GMT. This, in turn, may have an impact on the volatility of the U.S. currency in the pair.
On Thursday at 12:30 am GMT, we are waiting for the release of the Australian labor market data. As suggested by the forecast, the change in the February’s employment rate may be 48.5 thousand against -11.5 thousand in the previous period. Meanwhile, the unemployment rate is expected to decline from 3.7% to 3.6%.
Intraday technical picture:
On the 4H chart, the AUD/USD pair is consolidating in a narrow range between 0.6634 support marked with green dotted lines and 0.6669 resistance. The direction of the exit from the sideways range will depend on the the U.S. dollar’s behavior in response to the macroeconomic stats released this week.
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