As expected by the views of some market analysts, the initial strengthening of the US dollar on Tuesday was seen to be temporary as the US dollar returned to a weak move in Wednesday’s trading yesterday.
The US dollar is still overshadowed by the decline in US treasury yields which are seen to have slipped to around 1.54% as of this morning's Asian session.
The main focus today will be on the monetary policy meeting by the European central bank at 7.45 pm local time.
The European Central Bank (ECB) is expected to keep interest rates unchanged. A follow -up statement by the ECB will be of interest to investors with the expectation that a positive economic outlook and a reduction in bond purchases (tapering) will support the appreciation of the Euro.
The price movement on the chart of the EUR/USD currency pair today will definitely provide interesting action.
After the rise on Tuesday entered the resistance zone of 1.20600-1.20900, the price declined again and was supported at the level of 1.2000 yesterday.
Testing the RBS (resistance become support) zone, the price made a rise again due to the weak movement of the US dollar in the New York session.
Still, the price is still struggling to get past the Moving Average 50 (MA50) barrier in the 1 -hour time frame of price movement with investor vigilance ahead of the ECB meeting.
If the rise continues, the price will retest the resistance zone of 1.20600-1.20900 before a higher rise is expected to head up to the level of 1.21500 to record the latest 7-week high.
However, if the price plunges lower past the RBS 1.20000 zone, the price is likely to head back up to the 1.19000 level again.
