The US dollar remained weak until the end of trading this week with investors focusing more on high-yielding currencies following optimistic sentiment of a larger economic stimulus package in the United States (US) after Joe Biden took over as new US President.
The depreciation of the US dollar has allowed the Euro to continue its rise after European central bank policy meetings yesterday.
The European Central Bank (ECB) maintained interest rates unchanged and said it would continue to support economic recovery.
However, investors are wary of ECB President Christine Lagarde's warning of a new increase in the case of Covid-19 infection in Europe that will push for movement restrictions.
On the price chart for the EUR / USD pair, the price dropped to 1.20800 on Wednesday and returned to yesterday's bullish move up to the SBR (support become resistance) zone of 1.21500 again.
Movement above the Moving Average 50 (MA50) support level in the 1 hour time frame also signals a bullish trend.
If the price moves higher past the SBR zone 1.21500-1.21800 in today's trading, the rise is seen to test the higher SBR zone at 1.22000 and further to the level of 1.22500.
However, if the price falls again from the SBR zone, the price decline is seen to return to the weekly support zone at 1.20800 before the continued decline has the potential to reach the level of 1.20000.
Investors will monitor manufacturing and services PMI data in Europe and the US during the European session as well as the New York session later and will certainly have an impact on price movements.
