Volatility in the currency markets fell today as traders await the all-important labour market report from the US on Friday and the speeches of ECB President Mario Draghi at 17:15 and the Fed Chair Janet Yellen at 19:15 GMT. Rhetoric by the central bankers may result in a sharp rise in volatility. The greenback weakened somewhat today around speculations about possible changes of the Fed Governor to an individual with dovish views on monetary policy settings. This scenario may lead to a further depreciation of the US dollar against other major currencies.
The euro today was negatively affected by news of the decline in the common region’s retail sales by 0.5% in August compared to an anticipated increase of 0.3%. A small bright note came from the final services PMI report which grew in the Eurozone to 55.8 against the 55.6 forecasted.
GBP/USD bulls received some good news with the services PMI in the UK growing 53.6 which is 0.4 above the average expectations. Current price consolidation is explained by the influence of controversial factors. On the one hand, the chance of monetary tightening in the UK increased lately, while on the other hand the fears of a negative outcome to the Brexit talks are restraining the bulls from buying up the pound.
Expect to see increased trader activity for the AUD/USD following the release of retail sales and trade balance in Australia at 00:30 GMT tomorrow. These indicators traditionally have a strong influence on the mood of investors.
EUR/USD
The EUR/USD has left the limits of the local descending channel and keeps consolidating above the 1.1750 mark. Fixing the price beyond the limits of the channel may be a stimulus for continued increases up to 1.1825 and 1.1925. In case of a fall resuming, the nearest targets will be at 1.1620 and 1.1550.
GBP/USD
The British pound keeps consolidating near the important 1.3250 mark. A low amplitude of price fluctuations points to the possibility of a sharp movement soon. The signal to buy may come from gaining a foothold above the upper limit of the descending channel, but a more likely scenario may be the continued descending movement within the limits of the channel, with the closest targets at 1.3150 and 1.3050.
AUD/USD
Bulls were able to pull the AUD/USD price to the upper limit of the descending channel and the resistance at 0.7870. Breaking through these levels may become a strong trigger for massive buying with potential targets at 0.8000 and 0.8030. In case of crossing the SMA100 on the 15-minute chart, we may see a fall resume with the immediate goal at 0.7800 after which the quotes my reach 0.7740 and 0.7700.
