This week, the EUR/USD pair has been steadily going down. However, heavy news flow on Friday may spark an increase in its volatility and force a revision of technical forecasts.
Possible technical scenarios:
The daily chart shows that the EUR/USD pair has reached the support of the medium-term uptrend. At the same time, it hit the lower boundary of the sideways range between 0.0808 and 1.0958. If these levels manage to hold, the price may recover and climb up from the third point at the uptrend support. That being said, it still has the technical potential to put the strength of these boundaries to the test.
Fundamental drivers of volatility:
The GDP report for Germany's second quarter is due out on Friday at 6:00 AM (GMT). The annualized rate of economic growth is forecast to remain unchanged at 0.2% from the preceding period. Although the quarterly report predicted a growth rate of -0.1%, it now anticipates a growth rate of 0.0% for the current quarter.
The August reading of the German Ifo Business Climate Index is scheduled for release at 8:00 AM (GMT). This indicator is expected to drop from its current level of 87.3 to 86.7, which may be indicative of deteriorating conditions in the business world. Any discrepancies between actual and predicted figures in German figures may increase uncertainty surrounding the euro.
Christine Lagarde, president of the European Central Bank, will speak at the Jackson Hole Economic Symposium at 11:00 AM (GMT).
The Fed chief, Jerome Powell, is scheduled to speak at 2:05 PM (GMT).
Christine Lagarde, the head of the European Central Bank, will be giving another speech tonight at 7:00 PM (GMT).
Intraday technical picture:
As can be seen on the 4H chart of the EUR/USD pair, the price has approached the support at 0.0808. Once the position of quotes in relation to this border becomes clearer, it will shed light on the pair's movement direction going forward.
Throughout the week, the GBP/USD pair has maintained a sideways movement, with a calm news backdrop and market players remaining cautious in anticipation of Friday's speech by Fed Chairman Jerome Powell.
Possible technical scenarios:
Judging by the look of things on the daily chart, the GBP/USD quotes went down within the sideways range between 1.2601 and 1.2785. The price has a small room to move toward support, from which it may either reverse upwards again or break out 1.2601 and consolidate below it. This will pave the way to the support at 1.2410.
Fundamental drivers of volatility:
On Friday, the majority of market players will be paying close attention to the comments made by Jerome Powell, Fed’s Chair, scheduled to speak at 2:05 PM (GMT).
The dynamics of the US currency will depend on the tone of the speeches, and clarity will be needed from him over whether the Fed would still hike rates.
Intraday technical picture:
As evidenced by the 4H GBP/USD chart, the pair is trading in the lower portion of the corridor between 1.2601 and 1.2785. Nevertheless, there is still a possibility of a technical recovery in the sideways range until the price has broken out 1.2600 and updated the previous lows.
This week, the USD/JPY pair is showing signs of consolidation as traders wait for comments from the Chair of the Federal Reserve and are influenced by concerns about a possible intervention by the Bank of Japan.
Possible technical scenarios:
As we can see on the daily chart, the USD/JPY continues to trade in a sideways range between 144.98 and 146.93. The price currently has room to travel to its resistance. However, the quotes may reverse from last week's highs again and the pair will proceed to put the strength of 144.98 to the test. If there is a consolidation below it, the quotes may continue to weaken towards the support at 142.79.
Fundamental drivers of volatility:
The Bank of Japan stepped in to prop up the yen last year because it was falling into a "danger zone" of values. Nonetheless, prominent Japanese economists point out that the central bank will likely only resort to verbal intervention in the market until the value of 150 yen per dollar is reached.
Fed Chair Jerome Powell is scheduled to speak on Friday at 2:05 PM (GMT), and the tone of his remarks may have an impact on the dollar's performance against the pair.
Intraday technical picture:
The 4H chart of the USD/JPY pair demonstrates that the price is on its way to the previous week's and this week's highs, which are in the 146.40 area. In the event that they do not update, there will be a subsequent downward reversal.
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