The upward momentum of the US dollar has come to a halt, giving the EUR/USD pair room to climb this week.
Possible technical scenarios:
As we can see on the daily chart, the EUR/USD pair is testing the strength of the resistance level within the sideways range between 1.0492 and 1.0592. An upward exit from it will pave the way for further gains towards the next target at 1.0707 marked with dotted lines.
Fundamental drivers of volatility:
On Wednesday, all eyes will be on the euro as it reacts to Germany's September inflation data, set to be unveiled at 6:00 a.m. (GMT). Experts predict that the Consumer Price Index month-over-month will hold steady at 0.3%, while the figure year-over-year remains robust at 4.5%.
At 12:30 p.m. (GMT) on the same day, the United States Producer Price Index (PPI) for the month of September will take the stage, potentially shaking up the dollar's performance in the currency pair. The Core PPI month-over-month is anticipated to maintain its course at 0.2%, while the General PPI month-over-month is poised to dip from 0.7% to 0.4%.
Excitement continues to build as we approach 6:00 p.m. (GMT), when the minutes of the Federal Open Market Committee (FOMC) meeting will be revealed.
And there's more action to expect on Thursday at 12:30 p.m. (GMT), with the release of the United States inflation data for September. The Core Consumer Price Index year-over-year is projected to ease from 4.3% to 4.1%, while the figure month-over-month stays strong at 0.3%. The Consumer Price Index is also expected to show declines on both an annual (from 3.7% to 3.6%) and monthly (from 0.6% to 0.3%) basis.
Intraday technical picture:
As evidenced by the 4H chart of the EUR/USD pair, 1.0592 has been broken out; however, there is no clear consolidation above it yet. Quotes remain at a crossroads; the price has both enough room to travel toward 1.0707 and the chance to return to the support at 1.0492.
The GBP/USD pair is undergoing a resurgence, and when considering the prevailing downtrend on the daily chart, it appears to be a corrective phase.
Possible technical scenarios:
According to the daily timeframe, the GBP/USD quotes currently have limited room for movement towards the resistance at 1.2323, which coincides with the upper boundary of the downtrend. If it manages to stop the price, the pair may potentially trend towards 1.1934. That being said, a consolidation above 1.2323 may pave the way for further upward movement towards the target of 1.2410.
Fundamental drivers of volatility:
This week, the UK will see the release of the GDP report for August on Thursday at 6:00 a.m. (GMT). Economists anticipate an economic growth of 0.2% month-over-month, an improvement from the previous -0.5%. Any deviation from these forecasted values could potentially lead to increased volatility in the pound's performance.
Meanwhile, on the US front, the dollar's performance in the pair is likely to be influenced by the release of the Producer Price Index (PPI) and the publication of the FOMC minutes on Wednesday. On Thursday at 12:30 p.m. (GMT), the United States will release its inflation report for the month of September. Projections indicate a decline in the Core Consumer Price Index year-over-year from 4.3% to 4.1%. Additionally, the CPI YoY is expected to drop from 3.7% to 3.6%, with a decline month-over-month from 0.6% to 0.3%. These data releases may impact the dollar's movement in the pair.
Intraday technical picture:
Assessing the current developments on the GBP/USD 4H chart, it's evident that for the pair to continue its upward trajectory, it must surpass the highs recorded on October 6. Achieving this breakthrough would pave the way for the currency pair to advance towards 1.2323.
Despite the prevailing downtrend, the AUD/USD pair has witnessed a five-day consecutive recovery. The primary drivers of the pair's volatility continue to be the dynamics of risk appetite and the trajectory of the US dollar.
Possible technical scenarios:
Looking at the daily chart, we can see that the AUD/USD pair is in the midst of a recovery phase within a descending channel. The price has limited room to maneuver before reaching the resistance of the channel and the horizontal level at 0.6451. Should these levels act as barriers and stop the price, we may anticipate a reversal, potentially leading to a medium-term decline in quotes toward 0.6255.
Fundamental drivers of volatility:
The pair's performance during the current week will be primarily affected by the response of the US dollar to incoming macroeconomic data. Of particular importance are Wednesday's data regarding the Producer Price Index (PPI) and the release of the Federal Open Market Committee (FOMC) meeting minutes.
Aside from that, on Thursday at 12:30 p.m. (GMT), the United States will publish its inflation report for September. Projections suggest a decline in the Core Consumer Price Index year-over-year from 4.3% to 4.1%. Likewise, the Consumer Price Index (CPI) is anticipated to decrease from 3.7% to 3.6% for the year and from 0.6% to 0.3% for the month. These factors will play a pivotal role in shaping the pair's direction.
Intraday technical picture:
Judging by the unfolding situation on the 4H chart, the way to recovery toward the resistance at 0.6451 marked with dotted lines is now open for AUD/USD pair. That being said, there is limited room for movement toward this level. In the event of a downward reversal from it, the immediate target for a decline could be the October lows. On the other hand, if the pair consolidates above the resistance at 0.6451, it will pave the way for further upward movement towards 0.6537.
181
