Market turmoil earlier this week has seen a drastic change in the US dollar trading value at different sessions.
The US dollar strengthened during the Asian session yesterday to start trading early in the week well following market concerns with the emergence of a new variant of Coronavirus stifling previous positive sentiment with the initial distribution of vaccines.
However, the New York session saw a resurgence of the US dollar as investors' focus shifted back to the issue of the United States (US) economic stimulus package reportedly reaching an agreement. The results of the Congressional vote will be awaited.
If we look at the price movement on the EUR / USD currency pair chart yesterday, the price has made a decline at the beginning of the Asian session starting after there was a ‘gap’ at the opening of the price.
The price drop of around 100 pips was displayed continuously in the European session with the daily low reaching 1.21300.
However, after reaching that level, the price re-emerged in the New York session until 120 pips reached a high of 1.22500 higher than the previous opening price.
The price has also passed the Moving Average 50 (MA50) barrier level over the 1 hour time frame which gives an early signal for a bullish trend change on the EUR / USD chart.
If the focus remains on the US stimulus package that weakens the US dollar, the price has the potential to continue rising higher above last week's high of around 1.22700.
The next rise is seen to test the focus level at 1.23000 to record the latest high level since April 2018 trading.
However, if the development of the virus again raises market concerns, prices will plummet as early as yesterday's session heading back to the RBS zone (resistance become support) below the level of 1.21800.
