AUD/USD was one of the most volatile currency pairs over the last week, and it has a potential to maintain a leadership this week. On Tuesday, the RBA will keep it main refinancing rate unchanged at 2.50%, however, Stevens is likely to jawbone the Aussie, which is trading in the "uncomfortably high" area again. While daily and weekly aggregate technicals are pointing at further appreciation, a dovish RBA, as well as trade balance and retail sales are likely to offer not so bright prospects for the resource-rich economy, hence, a move towards 0.9328 (weekly S1; 200-period SMA on the 4H chart) can be anticipated. At the same time, bulls are facing strong resistance at 0.9445 level.
EUR/USD was the least volatile currency pair, with volatility inching to the turbulence area only for 12% of the time, as over the week, the pair was steadily climbing towards weekly R1 at 1.3652. In case, Monday's flash inflation figures surprises markets to the downside, analysts can fuel their speculations the ECB will pull the trigger any time soon again. Nevertheless, nobody expects it to happen this Thursday. While some call recent actions only as a "food for thought for macroeconomists", the ECB will most likely reiterate its pledge to act if data continues to worsen. It will be interpreted as a sell signal for the single currency. Any dovish comment will send the EUR/USD pair first to weekly pivot at 1.3582 and then to weekly S1 at 1.3521. Mario Draghi should be desperate to talk down the Euro, as his action on June 5 had little impact on the exchange rate.