The EUR/USD pair closes the week with an upward trajectory, driven by the anticipated monetary policy easing from the Federal Reserve set to commence next year.
Possible technical scenarios:
According to the daily chart, the EUR/USD pair has surpassed the 1.0958 level. Its subsequent direction hinges on whether it can break out and consolidate above both the November highs and the psychological level of 1.1000. In such a scenario, the growth target would be set at 1.1121. Alternatively, a return to the range between 1.0808 and 1.0958 presents an alternative technical outlook.
Fundamental drivers of volatility:
The release of the Personal Consumer Expenditure Price Index for November, a pivotal gauge of inflation preferred by the Federal Reserve, is anticipated today at 1:30 p.m. (GMT).
Presently, economists project the rate to remain relatively stable compared to the previous month, maintaining annual inflation within two-tenths of a percentage point of the Fed's 2% target.
Intraday technical picture:
Judging by the look of the unfolding situation on the 4H chart, the EUR/USD pair reached the resistance of the range between 1.0887 and 1.1008 marked with dotted lines. The price may either retreat from this level, reverting to the support, or attempt to break out 1.1008 and consolidate above it.
The GBP/USD pair found local support towards the week's close following the release of UK retail sales growth data.
Possible technical scenarios:
The GBP/USD pair is maintaining its position within the range between 1.2601 and 1.2785, demonstrating an upward rebound from its support level. This suggests a potential recovery towards 1.2785. An alternative scenario could involve the formation of a localized downward channel within this range, with the possibility of a breakout of its support.
Fundamental drivers of volatility:
Today's UK data showed a contraction in GDP and total production. That being said, a modest boost to the pound was provided by elevated retail sales, primarily influenced by Black Friday.
A major event on Friday will be the release of crucial US Personal Consumption Expenditures (PCE), the Federal Reserve's favored measure of core inflation. Forecasts indicate a 3.3% year-on-year uptick in the core figure, slightly below the 3.5% increase recorded in October.
Intraday technical picture:
Based on the 4H chart of the GBP/USD pair, it is evident that during the recovery phase, the pair reached the midpoint of the sideways range between 1.2601 and 1.2785. From this point, it has the potential to move towards any of its boundaries.
The USD/JPY pair is experiencing a decline this week amid the depreciation of the American currency. The price is under pressure due to expectations of a Fed rate cut next year.
Possible technical scenarios:
Throughout this week, USD/JPY has retraced from the resistance at 144.98 and is nearing a strong mirror support at 141.49. Should the price break out this level and consolidate below it, the subsequent southern target would be the 140.22 level.
Fundamental drivers of volatility:
At 1:30 p.m. (GMT) on Friday, US Core Personal Consumption Expenditure (PCE) figures are set to be released, likely impacting dollar volatility. The Fed's preferred measure of core inflation year-over-year is projected to increase by 3.3%, slightly down from the previous rate of 3.5% in October.
With such data, there is a likelihood that annual inflation over the past six months will remain within two-tenths of a percentage point of the Fed's 2% target.
Intraday technical picture:
As we can see on the 4H chart of the USD/JPY pair, there is a decline in price within a downward trend. In this range, quotes have room to move towards the levels of 141.49, 140.22, and 139.38.
181
