The US dollar has been moving weakly over the past week, but before closing trading on Friday and ending trading for April, the US dollar showed a resurgence.
Despite the profit-taking activity over the weekend and the close of April, the price movement on the EUR/USD chart gave an early signal for an impending trend change.
On Friday, the daily decline on the EUR/USD chart over 100 pips has re -passed the Moving Average 50 (MA50) support level on the 1 hour time frame of price movement.
The price also broke the support level of 1.20600 in the RBS zone (resistance become support) recording a weekly low around 1.20200.
Analysts are starting to see it as an early indication of a bearish trend after such a significant decline. But it is still too early to draw conclusions and need to observe the market movements this week.
The U.S. dollar is likely to have the potential to move positively this week ahead of the U.S. NFP jobs data report over the weekend with expectations of continued employment growth for April.
The initial decline on the EUR/USD chart is seen to test the support level at 1.2000 before the lower decline will head around the 1.19500 level.
Next, the price could potentially hit up to the focus level of 1.19000 if the US dollar continues to be strong and hits the latest 3 -week low.
On the other hand if the decline displayed is merely a price correction, the bullish trend of the price will still be resumed with the resistance level at 1.21500 will be re -tested again.
The price movement above the resistance level will record the latest high for the 10 -week trading period.
