In the first half of the week, the EUR/USD pair has been relatively stable as market players wait for news catalysts for volatility and Fed Chair Jerome Powell's speech on Friday.
Possible technical scenarios:
As we can see on the daily chart, the EUR/USD pair is trading at the bottom of the medium-term uptrend. The price also remains in the middle of the sideways range between 0.0808 and 1.0958, where it still has some room to move to the south.
Fundamental drivers of volatility:
On Wednesday, German and Euro Area Purchasing Managers' Indices (PMI) could affect the euro in the pair, while US PMI figures may have an impact on the volatility of the dollar throughout the US session.
The PMIs for August in Germany will be released at 7:30 AM GMT. Preliminary expectations place the Manufacturing PMI at 38.7, down from the prior reading of 38.8. In the meantime, we anticipate a drop in the Services PMI from 52.3 to 51.5.
The Euro Area PMI for the month of August will be made public at 8:00 AM GMT. It is predicted that the Manufacturing PMI will increase to 42.8 from 42.7, while the Services PMI will go down to 50.5 from 50.9.
The United States PMI in August will be released at 1:45 PM GMT. The Services PMI is likely to remain constant at 52.3, while the Manufacturing PMI is anticipated to climb from 49.0 to 49.4.
Intraday technical picture:
Judging by the look of things on the 4H chart of the EUR/USD pair, the price's pullback from 1.0933-1.0958 resistance area sets up technical conditions for the retest of last week's lows.
There has been no shift in the dynamics of the GBP/USD pair since last week. The pound remains stable against the dollar, while market players prepare for the release of macroeconomic numbers and comments from the Fed chairman at the end of the week.
Possible technical scenarios:
The GBP/USD pair on the daily chart continues to consolidate below the resistance of the sideways range between 1.2601 and 1.2785. Both a reversal to the downside and an attempt to break out 1.2785 and consolidation above it are still possible technical outcomes in this conext, with 1.2957 serving as the next technical goal.
Fundamental drivers of volatility:
The release of the UK and US Purchasing Managers' Indices (PMI) on Wednesday may cause the pair to fluctuate rapidly.
The United Kingdom Services PMI is scheduled to be released at 8:30 AM (GMT). From the current level of 51.5, it is expected to drop to 50.8.
The United States PMI for the month of August is expected at 1:45 PM GMT. Manufacturing PMI is anticipated to climb from 49.0 to 49.4, while the Services PMI is expected to remain unchanged at 52.3.
Intraday technical picture:
As evidenced by the 4H chart, the GBP/USD pair is once again bouncing downward from the resistance at 1.2785, which clears the path for it to head toward the 1.2683 support. In the event that the horizontal line at 1.2683 is broken out from top downward, the pair will continue its descent toward the 1.2601 level as its next target.
After trading sideways for five months, the AUD/USD pair dropped last week. The movement of the US dollar this week will determine whether or not the price is able to rebound and return back into this range.
Possible technical scenarios:
The daily chart shows that the AUD/USD pair has broken out the support at 0.6458 formed by the lows of May 31. At the moment, the price has pulled back to it from below. This creates the prerequisites for one of two technical scenarios. If 0.6458 is confirmed by a downward bounce as resistance, the price may return to last week's lows or drop below the support at 0.6255. On the other hand, the AUD/USD pair might keep climbing toward 0.6537.
Fundamental drivers of volatility:
The AUD/USD's movement this week will largely be determined by the uncertainty surrounding the US dollar, which will be affected by the following macroeconomic events:
The United States Building Permits will be released on Wednesday at 12:00 PM GMT and is expected to rise to 1.442 million from the previous period's 1.441 million.
The United States Purchasing Managers' Index (PMIP for the month of August is expected at 1:45 PM GMT. Forecasts call for the Services PMI to hold steady at 52.3 while the Manufacturing PMI increases from 49.0 to 49.4.
The rhetoric of the central banks’ executives at the Jackson Hole Symposium on Thursday and Friday may also affect price swings.
Intraday technical picture:
As can be seen on the 4H chart of the AUD/USD pair, the price is currently attempting to retreat downward from the resistance at 0.6458, which does not rule out a return to last week's lows. Having said that, quotes may still proceed to put the strength of 0.6458 to the test.
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