As the week came to a close, the EUR/USD pair shifted into a mode of restricted consolidation while the market players waited for fresh sources of volatility to emerge.
Possible technical scenarios:
The daily chart shows that EUR/USD quotes are trading within a narrow area below 1.0958 and above the support at 1.0933 marked with dotted lines. Exiting from it downward will let the price continue falling toward 1.0808. The retracement of the pair's price to the corridor between 1.0958 and 1.1121 and subsequent recovery would constitute an alternative technical scenario.
Fundamental drivers of volatility:
The release of the US employment data at 12:30 (GMT) on Friday will likely be the most significant event that contributes to the pair's volatility today. Typically, this triggers a rise in the value of the US dollar.
The rise of the average hourly pay is expected to decelerate from 0.4% to 0.3% according to the forecasts. It is anticipated that the number of people employed in nonfarm payroll jobs in the United States (Nonfarm Payrolls stats) will decrease by 200,000 compared to the previous period's figure of 209,000.
At the same time, analysts predict that the rate of unemployment will not change from its current level of 3.6%.
Intraday technical picture:
After a pullback, it is clear from looking at the 4H chart of EUR/USD that the pair is still trading below the resistance level of the tight sideways range that lies between 1.0833 and 1.0958. The reaction of the US dollar to today's news on the labor market will be determined by the direction in which it exits from it.
After the Bank of England’s meeting, the GBP/USD pair dropped. The Bank of England increased interest rates by 0.25%, as was predicted; however, this increase was below the concerns of a 0.5% hike. As a result of declining inflation, the British central bank’s rhetoric became somewhat less harsh.
Possible technical scenarios:
The daily chart shows that the GBP/USD pair fell to the lower boundary of the sideways range between 1.2601 and 1.2785, but it has since retreated higher from that point. From a technical standpoint, there is room for the price to recover to the resistance of the range. The breakout of 1.2601 and consolidation below it is an alternate scenario that could play out. If this happens, it will clear the path for the price to continue falling.
Fundamental drivers of volatility:
Investors will be watching the July employment report for the United States, due out Friday at 12:30 pm GMT. The US dollar's volatility will be affected by the degree to which actual figures deviate from forecasts.
The average hourly wage growth forecast is lowered from 0.4% to 0.3%. The number of people on non-farm payrolls in the United States (Nonfarm Payrolls stats) is expected to fall by 200,000 from the previous period's total of 209,000. The unemployment rate is expected to remain unchanged at 3.6%.
Intraday technical picture:
As we can see on the 4H chart of the GBP/USD pair, there has been a descending channel and the price rebounded from its support yesterday. The horizontal level at 1.2785 is the immediate goal for growth as part of this trend, which calls for the pair to make a movement toward a recovery toward its resistance.
In this week's trading, the USD/JPY pair has been under pressure as a result of the weakening of the Japanese yen and the gradual strengthening of the US dollar.
Possible technical scenarios:
However, by Friday, quotes had already shifted to a sideways dynamic, trading the 142.79 mark. The immediate technical benchmarks for USD/JPY are support at 141.49 and resistance at 144.98. How the US dollar responds to today's jobs report is likely to determine the direction in which it exits its current consolidation range.
Fundamental drivers of volatility:
The reaction of the US currency to the US jobs report to be released at 12:30 PM GMT may affect the dynamics of USD/JPY on Friday.
The predicted growth in average hourly wages is slowing from 0.4% to 0.3%. Nonfarm payrolls in the United States are expected to drop to 200,000 from 209,000 in the prior period with the unemployment rate remaining unchanged at 3.6%.
Intraday technical picture:
The lows and highs of Thursday's trading session should be treated as local technical benchmarks when examining the 4H chart of the USD/JPY currency pair. Right now, it is trading close to its lower boundary, which places it in a position to either recover or update yesterday's lows.
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