The price chart for the EUR/USD pair started showing a bearish pattern last week before an aggressive movement on Friday.
Pressure on Euro trading came as the focus was on a statement by the European Central Bank (ECB) signaling to continue to maintain loose monetary policy following low and volatile inflation factors.
On Friday, the aggressive price movement was driven by the release of strong spending index data in the United States (US), prompting expectations of an increase in inflation while strengthening forecasts for the Federal Reserve (Fed) to implement a reduction in asset purchases (tapering) earlier.
However, the strengthening of the US dollar was only temporary before a return to decline closed the trade curtain last week.
The decline has passed the RBS (resistance become support) zone at 1.21800-1.21500 after the price moved below the Moving Average 50 (MA50) barrier level in the 1 hour time frame of the price movement.
However, the situation of the bearish trend movement changed again when the price rebounded past the RBS zone and also passed the MA50 barrier. This gives an early sign for the price to resume its previous bullish trend.
Starting this week's trading in the Asian session, the price was also supported at the MA50 level and showed a hovering rise at the level around 1.22000. Price movements however are still slow.
The price increase is expected to head back to the 1.22500 resistance zone tested last week.
To continue to hit the latest 4 -week high, the price needs to overcome the resistance level before expecting a higher rise to the next target level around 1.23000.
However if the price plunges back below the support zone of 1.21800-1.21500, the bearish trend of the price will push the decline towards the lower RBS zone at 1.20900-1.20600.
The continued decline may reach back to the key support zone at 1.20000.
Price movements are expected to slow this week as investors are likely to be cautious ahead of the US NFP jobs report on Friday.
