Trading in the US dollar towards the weekend is seen to continue to decline after the FOMC meeting early Thursday morning yesterday.
Also driving the depreciation of the US dollar as the US GDP growth data for the last quarter of 2020 declined significantly as expected by the market.
With a reading of 4.0% compared to the expected 4.2%, it is significantly lower than the previous quarter reading of 33.4%.
This is one of the indications that the economic recovery process in the US is still slow with economic activity still affected by the pandemic crisis.
Examining the price chart of the major currency pair EUR / USD this week, the price showed a significant decline on Wednesday ahead of the FOMC meeting but there was a resurgence in trading on Thursday yesterday following the weakening US dollar.
After leveling above the support level of 1.20900, the price jumped 50 pips yesterday to around 1.21400 but is seen struggling to maintain the bullish momentum.
In the Asian session this morning (Friday) the price moved back below the Moving Average 50 (MA50) barrier level again at the 1 hour movement which signaled a tendency for the price to fall lower.
As for the Euro, investors will also be cautious ahead of European economic data with the main focus on the GDP report of the last quarter of 2020 in Germany.
If the reading of the data is disappointing for the Euro, the price is likely to fall lower for this week's trading close.
The downtrend will test the 1.20900 support level before the downtrend will return to the 1.20000 focus support zone.
On the other hand if the price manages to soar, the focus zone in the previous weeks around 1.21500-1.21800 will be re-tested.
