The strengthening of the U.S. dollar in response to investors' desire to reduce their exposure to risk has continued to exert pressure on the EUR/USD pair. In addition, the decline in the value of the single European currency can be attributed to the news of a recession in Germany, the largest economy in the EU.
Possible technical scenarios:
After consolidating below 1.0808 on the daily chart, the EUR/USD pair continued to decline and eventually reached the closest support at 1.0707. In the event that it manages to halt the price, we can anticipate a recovery within this area. If this does not occur, the price of the quotes could go down to 1.0592.
Fundamental drivers of volatility:
Market players are currently paying close attention to the ongoing discussion over raising the United States' debt ceiling. On the other hand, the U.S. dollar may respond to the block of macroeconomic stats that will be released on Friday with a local spike in volatility.
The report on durable goods orders in the United States will be released at 12:30 pm GMT. It is expected that the core monthly orders for the month of April will show no growth, compared to a growth of 0.3% in the prior period.
At the same time, the figures on personal consumption expenditures in the United States for the month of April will be released. It is anticipated that the core price index for personal consumption spending would remain at 0.3%, the same as it was during the prior period. At the same time, it is anticipated that the month-over-month spending of individuals will climb by 0.4%, up from 0.0% previously.
Intraday technical picture:
As we can see in the 4H chart of the EUR/USD pair, the price is still unsure of where it stands in relation to the support level at 1.0707. The price's next movement will be determined either by a rebound to the upside or by a breakout and consolidation to the downside.
As a result of the U.S. dollar's recent gain, the GBP/USD currency pair is now on a downward trend; however, data coming out of the UK at the end of the week may temporarily change its trajectory.
Possible technical scenarios:
The GBP/USD pair broke out 1.2410 and fell to the next support level of 1.2323. In the event that the price is halted at this level, quotes may move back toward the existing resistance at 1.2410. On the other hand, if the price breaks out 1.2323 and consolidates below it, it would pave the way for a slide to the support at 1.2269 marked with dotted lines.
Fundamental drivers of volatility:
On Friday, there will likely be a volatile reaction to Friday's UK and US news if the actual figures are higher or lower than expected.
The UK retail sales report will be released at 6:00 am GMT. In contrast to the previous decline of 0.9%, we are expecting a month-over-month expansion of 0.4%.
The Core Retail Sales Index is anticipated to come in at 0.3% MoM compared to the previous reading of -0.1% and at -2.8% YoY in contrast to the previous reading of -3.2%.
The Durable Goods Orders in the United States will be released at 12:30 pm GMT. GMT. In April, it is anticipated that base orders MoM would grow by zero compared to the 0.3% expansion seen in the previous period.
At the same time, the data on personal consumption expenditures in the United States for the month of April will be released. It is anticipated that the core price index for personal consumption spending would remain at 0.3%, the same as it was during the prior period. Meanwhile, the month-over-month spending of individuals will climb by 0.4%, up from 0.0% previously.
Intraday technical picture:
A small downtrend has formed and the price has reached support on the GBP/USD 4H chart. Given this context, a corrective pullback higher from the 1.2323 level toward the trend resistance zone above the horizontal line of 1.2410 is likely.
The strength of the U.S. dollar has contributed to a significant increase in the value of the USD/JPY so far this week. Due to the uncertainties around the issue of the U.S. national debt ceiling, the U.S. currency continues to be the primary focus of market players as a safe-haven asset.
Possible technical scenarios:
The USD/JPY quotes pair successfully consolidated over the semi-annual resistance level of 139.38 and reached the subsequent goal of 137.89. If this growth pattern continues, the quotes may eventually settle somewhere between 140.22 and 141.49.
Fundamental drivers of volatility:
What happens to the value of the U.S. dollar relative to the other currency in this pair will be determined by developments related to the debt ceiling debate in the United States and by the latest macroeconomic data.
The report on the United States' Durable Goods Orders is scheduled to be released at 12:30 pm GMT. GMT. As a comparison to the expansion of 0.3% recorded in the prior period, it is projected that base orders will expand by no more than 0% month-over-month in the month of April.
At the same time, we are expecting a release of the latest PCE data for the United States, covering the month of April. The personal consumption expenditure core price index is forecasted to remain unchanged at 0.3% from the previous period. Individuals' monthly spending will increase by 0.4%, up from 0.0% earlier.
Intraday technical picture:
As can be observed on the 4H chart of the USD/JPY pair, the price is making an attempt to consolidate higher than 139.38, which clears the path toward the closest resistance at 140.22.
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