As the US dollar resumed its upward trend this week, the EUR/USD pair was unable to make any major gains.
Possible technical scenarios:
The daily chart of the EUR/USD pair shows that the price has hit the support area between 1.0933 and 1.0958. If the price is able to break it out and consolidate lower, the horizontal support level of 1.0808 will serve as the next target. Otherwise, the pair may go back to the corridor between 1.0958 and 1.1121.
Fundamental drivers of volatility:
There won't be much in the way of news this week, with Thursday's 12:30 PM GMT release of the US inflation report being the only major event that could affect the volatility of the US dollar in the pair.
It is anticipated that the annual core consumer price index would fall to 4.7% from its current level of 4.8%, while its monthly rate will remain unchanged at 0.2%. The consumer price index for the month is expected to remain unchanged at 0.2%, the same as it was in the previous period; however, the annual rate will accelerate from 3.0% to 3.3%.
Intraday technical picture:
As can be seen on the 4H chart of the EUR/USD pair, it has reached the lower boundary of the support area between 1.0833 and 1.0958. We have to wait for the pair to figure out where it stands in relation to the boundary before making any predictions.
As the US dollar has resumed its upward trend this week, the GBP/USD pair has been falling this week.
Possible technical scenarios:
As evidenced by the daily chart, the GBP/USD pair reversed downward from the upper boundary of the sideways range between 1.2601 and 1.2785, while having sufficient room to move toward its support.
Fundamental drivers of volatility:
This week’s British GDP report is due out on Friday and may affect the pound's performance in the pair.
The most important thing that will happen this week is the release of the US inflation data for July at 12:30 PM GMT. This will likely result in an increase in the value of the US dollar right now and will also determine the direction that it will go in over the next few days.
The core consumer price index is expected to drop from 4.8% to 4.7% year-over-year, while remaining stable at roughly 0.2% month-over-month, according to the estimates. The consumer price index year-over-year will climb from 3.0% to 3.3%, while retaining its current value of 0.2% month-over-month.
Intraday technical picture:
As we can see on the 4H chart of the GBP/USD pair, the price is showing signs of technical decline in the price in the sideways range between 1.2601 and 1.2785, which sets the stage for the price to continue falling until it reaches the corridor's bottom boundary.
The rise of the US dollar led to a decline in the AUD/USD pair the previous week. The Australian dollar was put under major pressure on Tuesday as a result of statistics showing a stronger-than-expected decrease in China's imports and exports. This is another indicator of the weak economic recovery taking place in China.
Due to the tight economic link between Australia and China, the value of the Australian dollar is very susceptible to changes in the Chinese economy.
Possible technical scenarios:
The daily chart shows that the AUD/USD pair is putting the strength of the lower boundary of the medium-term sideways range between 0.6537 and 0.6893 to the test. Until price consolidation occurs below the May 31 lows, the breakout will be regarded false. If the price moves up from these levels, the pair may recover in the sideways range. If this doesn't change, the pair might go as low as 0.6255.
Fundamental drivers of volatility:
Inflation statistics for the United States for July, due out at 12:30 PM GMT on Thursday, will likely affect the movement of the US dollar in the pair.
The monthly core consumer price index is projected to remain unchanged at roughly 0.2% and the yearly figure is expected to fall from 4.8% to 4.7%.
It is anticipated that the growth in the annual consumer price index would range between 3.0% to 3.3%, along with a rise of 0.2% for the month.
Intraday technical picture:
According to the AUD/USD 4H chart, the lower line around 0.6458, drawn from the lows of May 31st, continues to serve as the closest support. If it manages to stop the price, the pair will likely bounce back.
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