Throughout the week, the EUR/USD pair has maintained an upward trajectory, with only a slight dip observed on Thursday, bolstered by a weakening US dollar.
Possible technical scenarios:
As evidenced by the daily chart, the EUR/USD pair has reached the resistance level of 1.0749. Should this level be broken out and the price consolidates above it, the next growth target would be the resistance at 1.0801. Support is currently identified at the level of 1.0672.
Fundamental drivers of volatility:
The ongoing ascent of the EUR/USD pair is fueled by the dollar's diminishing strength. Disappointing US GDP data, indicating a 1.6% growth against the expected 2.5%, left markets unsatisfied.
Today, investors will closely monitor the release of March's US personal consumption expenditures data at 12:30 p.m. (GMT). Forecasts anticipate the core personal consumption expenditures price index to remain at 0.3% monthly, with a decrease from 2.8% to 2.6% annually. Conversely, the annual personal consumption expenditures price index is expected to rise from 2.5% to 2.6%, with a monthly increase of 0.3%, mirroring the previous period. Individual spending is projected to increase by 0.6%, compared to the previous rise of 0.8%.
Any deviation from these forecasts may amplify volatility in the pair.
Intraday technical picture:
On the 4H chart, the EUR/USD pair is currently trading within a narrow range between 1.0723 and 1.0749. The market's reaction to today's data is likely to dictate whether the pair breaks out of this range, either upwards or downwards.
The GBP/USD pair continued its upward momentum for the fourth consecutive day, buoyed by a weakened dollar.
Possible technical scenarios:
Judging by the look of things on the daily chart, the GBP/USD pair surpassed the 1.2500 level. Its future trajectory hinges on whether the price consolidates above this significant technical and psychological threshold. Should consolidation occur above the marked resistance of 1.2526, it would pave the way for further advancement toward the subsequent target of 1.2608.
Fundamental drivers of volatility:
The ascent of the GBP/USD pair is attributed to differing expectations concerning central bank monetary policies. While the Federal Reserve is not anticipated to enact rate cuts before September, speculations suggest that the Bank of England might commence rate reductions in the summer.
Recent US data and statements from Fed officials have reinforced the notion that the US central bank will adopt a measured approach toward reducing borrowing costs.
However, expectations may be recalibrated following the release of March's US personal consumption expenditures report, a key inflation indicator, scheduled for 12:30 p.m. (GMT) today.
Intraday technical picture:
According to the 4H chart, the GBP/USD pair is currently consolidating within a narrow range between 1.2500 and 1.2526. The pair could exit this range, either upwards or downwards, in response to heightened dollar volatility triggered by the release of US personal consumption expenditures data. A move upwards would target the 1.2608 level, while a move downwards could see the price retreat towards support at 1.2430.
The USD/JPY pair experienced a sharp increase, surging past 156 yen per dollar following the Bank of Japan's decision, prompting speculation about potential currency intervention.
Possible technical scenarios:
Examining the daily chart, we observe that the USD/JPY price has exceeded the 154.83 level and is nearing the resistance at 157.10. It is likely that the boundaries of this range will maintain relevance until the week's end.
Fundamental drivers of volatility:
On Friday, the Bank of Japan opted to maintain its main interest rate between 0.0 and 0.1%. While acknowledging the possibility of future inflation stabilization and rate hikes, the central bank refrained from specifying a definite timeframe for implementing monetary policy tightening measures.
This lack of clarity disappointed the market, especially in contrast to expectations of sustained high Fed rates until at least September. Consequently, the Japanese yen weakened, albeit concerns about potential currency intervention by Tokyo tempered the decline.
Intraday technical picture:
Judging by the unfolding situation on the 4H chart, it is apparent that the USD/JPY pair has retraced some of its earlier gains within the 154.83-157.10 corridor. That being said, there remains a slight room for movement towards its resistance level.
11