The EUR/USD pair is hitting new highs while relatively strong macroeconomic stats from the euro area boost the euro and the U.S. dollar remains under pressure against the backdrop of recession fears.
Possible technical scenarios:
As can be seen in the daily chart, the EUR/USD quotes continue to put the resistance at 1.1032 marked with green dotted lines to the test. If the price manages to consolidate above it eventually, the resistance at 1.1121 will serve as the next growth target. An decline in quotes in the range between 1.0930 and 1.1032 marked with green dotted lines may serve as alternative scenario.
Fundamental drivers of volatility:
Until the end of the week, the behavior of the U.S. dollar in the pair will be sensitive to the U.S. Gross Domestic Product in Q1 2023 to be released on Thursday and Personal Consumption Expenditures (PCE) figures expected on Friday. The Core Personal Consumption Expenditure Price Index is projected at 0.3% month-over-month and 4.5% year-over-year. Meanwhile, expenditures of individuals are expected to drop 0.1% in March as compared to the 0.2% growth earlier.
On Friday, the euro may be volatile following the release of a large chunk of critical data from Germany, namely job market, GDP and inflation figures.
In addition, the Euro Area GDP will be released on Friday at 8:00 am GMT. The annual economic growth rate is projected at 1.4 and at 0.2% quarter-over-quarter.
The United States Philadelphia Fed Manufacturing Index for the month of April will be released at the same time. It is expected to increase to -19.2 as compared to -23.2 previously.
Intraday technical picture:
The 4H chart of the EUR/USD pair shows that the price seems to have consolidated above the resistance at 1.1032. If it remains standing as support, we may expect a rise toward 1.1121.
The GBP/USD pair continues to demonstrate sideways dynamics as investors are waiting for the central bank’s meetings which may shed more light on what will happen next to the interest rates.
Possible technical scenarios:
The daily chart shows that the GBP/USD quotes remain near the upper boundary of the sideways range between 1.2343 and 1.2525 marked with green dotted lines. The price pulled back from it downwards on Wednesday yet may repeatedly put the strength of 1.2525 to the test until the end of the week. With an unclear downward reversal from it, the price may continue traveling toward support at 1.2343.
Fundamental drivers of volatility:
The response of the U.S. dollar to the upcoming macroeconomics statistics may affect the volatility of the pair until the end of the week.
The U.S. Gross Domestic Product in Q1 2023 will be released on Thursday at 12:30 pm GMT. Economic growth rates are projected at 2.0% as compared to 2.6% previously.
The Personal Consumption Expenditures (PCE) in the United States will be released on Friday at 12:30 pm GMT. The Core Personal Consumption Expenditure Price Index is projected at 0.3% month-over-month and 4.5% year-over-year. The expenditures of individuals for the month of March are expected at 0.1% as compared to 0.2% previously.
Intraday technical picture:
As can be seen in the 4H chart, the GBP/USD pair is consolidating in the corridor between 1.2410 and 1.2525 which are support levels. The price may travel locally toward any of the boundaries from this technical position.
The USD/JPY pair has remained under pressure while the U.S. dollar has demonstrated a decline against a basket of currencies amid recession fears. In the meantime, the market players are looking forward to the first statements from Kazuo Ueda as the new BOJ governor as this may affect the volatility of the Japanese yen.
Possible technical scenarios:
USD/JPY quotes are putting the strength of the horizontal support at 133.59 to the test. Consolidation below it will pave the way for the pair’s further weakening. Given the local uptrend we see in the chart, the downward correction may continue toward the area of 133.0 yen per dollar.
Fundamental drivers of volatility:
The Japanese yen may be volatile until the end of the week following the BOJ meeting results on Friday expected at 3:00 am GMT. Monetary policy and economic outlook reports will be released. Aside from that, we are waiting for the Bank of Japan’s first press conference presided by new Governor Kazuo Ueda.
In the meantime, the U.S. dollar in the pair may be affected by U.S. GDP data in Q1 2023 released on Thursday and Personal Consumption Expenditures figures on Friday at 12:30 pm GMT.
According to the forecast, the Core Personal Consumption Expenditure Price Index is projected at 0.3% month-over-month and 4.5% year-over-year. The expenditures of individuals month-over-months for the month of March are projected at -0.1% as compared to 0.2% previously.
Intraday technical picture:
As evidenced by the 4H chart of the USD/JPY pair, it is yet unclear which side of the 133.59 level the price will consolidate on. If the price hits new highs, this will open the way for the pair to support the uplink.
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