The EUR/USD pair has been trading under pressure. Its direction in the second half of the week, though, will be determined by how the US dollar responds to the emerging data.
Possible technical scenarios:
The EUR/USD pair has been trading in the range between 1.0808 and 1.0958. From the middle of this range, the quotes may travel to any of the boundaries of the flat.
Fundamental drivers of volatility:
The Services PMI in Germany and the euro area may affect the movement of the euro in the pair on Wednesday. The first one is scheduled for 7:55 AM GMT, and is anticipated to be 54.1.
We should have the Services PMI in the euro area at 8:00 AM GMT. It is expected to total 52.4 and the composite PMI is projected at 50.3.
The release of FOMC minutes at 6:00 PM GMT on Wednesday could affect the value of the US dollar.
On Thursday at 12:15 PM GMT, the ADP agency will release its report on changes in the number of employed in the US non-farm sector (Nonfarm Payrolls) for June, which is expected to total 30,000 compared to May's 278,000.
Intraday technical picture:
As can be seen on the 4H chart of the EUR/USD pair, in the absence of a change in technical parameters due to the reaction of the US dollar to the news, a string of falling lows does not rule out the possibility of quotes dropping below the lower boundary of the sideways range between 1.0808 and 1.0958.
Because of the Independence Day celebration in the United States, the dynamics of the GBP/USD pair are predicted to stay subdued at the beginning of the week. The majority of the week's noteworthy events are anticipated to take place in the second half of the week.
Possible technical scenarios:
Trading in the midst of the 1.2601 - 1.2785 range on the daily chart, the GBP/USD pair has enough room to move toward its resistance. However, from the middle of the range, the price may travel to any of its boundaries.
Fundamental drivers of volatility:
The UK PMI data for June will be made public on Wednesday at 8:30 AM GMT, which may prompt a reaction from the pound sterling. The composite PMI is projected to reach 52.8, while the services PMI is projected at 53.7.
The FOMC minutes are scheduled to be released on Wednesday at 6:00 PM GMT. Depending on the tone of the minutes, the volatility of the dollar in the pair may be affected. ADP will release data for June on changes in the number of persons employed in the US non-farm sector (Nonfarm Payrolls) on Thursday at 12:15 PM GMT. The US dollar may respond to these figures. It is anticipated that the indicator would be at the level of 230 thousand, which compares to 278 thousand in May.
Intraday technical picture:
As we can see on the 4H chart of the GBP/USD chart, the price consolidation in the middle of the range creates prerequisites for further increase provided that the price manages to consolidate above the June 30 highs.
In a surprising move on Tuesday, the Reserve Bank of Australia did not hike interest rates but did signal future tightening of monetary policy. The Australian dollar demonstrated a local slide against this backdrop.
Possible technical scenarios:
As evidenced by the daily chart, the AUD/USD pair is on its way to the resistance of the range of 0.6567 to 0.6798. That being said, it has to overcome the intermediate level of 0.6669 in order to rise further.
Fundamental drivers of volatility:
The United States is likely to provide the primary source of pair volatility until the week's end. The Federal Open Market Committee minutes will be issued on Wednesday at 6:00 PM GMT, while ADP's report on June employment developments in the US nonfarm sector will be made public on Thursday at 3:15 PM GMT. The estimated number is 230k, down from 278k in May.
The biggest source of volatility on Friday will be the reaction to US job data, which may change the pair's technical picture. Forecasts indicate that the unemployment rate will stay steady at 3.7%. Nonfarm payrolls in the United States are expected to increase by 225,000, down from 339,000 in the previous week.
Intraday technical picture:
Judging by the look of the 4H chart of the AUD/USD pair, the likelihood of a price consolidation above 0.6669 is currently low. After Monday's highs are updated, we can discuss whether or not the price will continue to rise to the 0.6798 resistance level.
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