By Wednesday, the EUR/USD pair won back losses of Monday's trading session after the figures confirming the American job market stability had boosted expectations of the Fed interest rate hike in March.
Possible technical scenarios:
We can see the EUR/USD pair recovering within the sideways range between 1.0808 and 1.0958 in the daily chart. The movement range toward resistance remains small. Once it is reached, two scenarios are likely here—the price may either reverse within the corridor or attempt to break out 1.0958 and consolidate above that level. In the second instance, the next target for the pair’s further strengthening will be the local resistance at 1.1032 drawn along the February 2 highs.
Fundamental drivers of volatility:
Wednesday’s dynamics of the EUR/USD pair will depend primarily on the U.S. dollar since we are expecting the release of critical volatility catalysts from the United States.
The American inflation figures for the month of March will be published at 12:30 pm GMT. The Core CPI MoM is expected to decline from 0.5% to 0.4% and may rise from 5.5% to 5.6% year-on-year.
The Consumer Price Index MoM is expected to go down from 0.4% to 0.2% and from 6.0% to 5.2% year-on-year.
FOMC minutes will be published at 6:00 pm GMT.
Intraday technical picture:
On the 4H chart of the EUR/USD pair, the price has already reached the resistance area between 1.0936 and 1.0958. This does not rule out a reversal from the current levels. At the same time, we should remember that the surge of the U.S. dollar’s volatility on the news may affect the technical benchmarks.
The GBP/USD pair has been sensitive to the behavior of the U.S. dollar this week. The price has pulled back from last week's ten-month high and the likelihood of a pullback to it will depend on the U.S. stats.
Possible technical scenarios:
The daily chart shows that the GBP/USD price has returned to 1.2410 after dropping below it on Monday. From a technical perspective, the pair has a chance to grow to the April 4 highs in case of consolidation above 1.2410 and decline to the support at 1.2323 provided that the price fails to overcome the 1.2410 horizontal line.
Fundamental drivers of volatility:
On Wednesday, the market players will be keeping a close eye on the news from the United States which will provide more clarity on the Fed's future plans regarding monetary policy. The volatility of the U.S. currency in the pair is likely to intensify amid these developments.
The American inflation figures for the month of March will be released at 12:30 pm GMT, with the FOMC protocol expected at 6:00 pm GMT.
The Core CPI MoM is expected to decline from 0.5% to 0.4%, while CPI YoY may rise from 5.5% to 5.6%. At the same time, the Consumer Price Index MoM is expected to go down from 0.4% to 0.2% and from 6.0% to 5.2% year-on-year.
Intraday technical picture:
On the 4H chart of the GBP/USD pair, we are witnessing its attempt to consolidate above 1.2410. This does not rule out further recovery. That being said, the way the U.S. dollar will react to the news may affect this technical scenario.
The AUD/USD pair has been consolidating this week in anticipation of fundamental volatility drivers.
Possible technical scenarios:
AUD/USD quotes are trading below the resistance level at 0.6669. If this level holds ground as resistance, the price may fall to the nearest support at 0.6567 which is marked by the bottom green dotted line. A consolidation above 0.6669 followed by an increase towards the target at 0.6722 marked with upper green dotted lines may serve as an alternative scenario.
Fundamental drivers of volatility:
The pair's volatility this week will be sensitive to the American stats which will provide more clarity on the Fed's next steps as far as monetary policy goes. In turn, they will have an impact on the further behavior of the U.S. dollar in the pair.
On Wednesday at 12:30 pm GMT, we are expecting the release of the U.S. inflation figures for the month of March and the FOMC protocol at 6:00 pm GMT. On Friday at 12:30 pm GMT, you should pay close attention to the U.S. Retail Sales.
The volatility of the Australian dollar may intensify locally on Thursday at 1:30 am GMT amid the release of the Australian job market figures for the month of March.
Intraday technical picture:
The price is still confirming the 0.6669 level as resistance on the 4H chart. That being said, the reaction of the U.S. currency to the news today will most likely clarify the position of the pair in terms of this boundary.
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