The US dollar continued to move weakly to several -month lows against European currencies as well as commodity currencies as a bearish pattern reappeared in US treasury yields to 1.60% again after previous gains had managed to reach 1.70%.
US interest rates are expected to remain low for a longer period making the value of the US dollar continue to come under pressure.
On the price chart of the EUR/USD pair, the price rebounded after moving slightly lower in the Asian session yesterday. The rise in prices in the European session was seen to be more driven by the depreciation of the US dollar in the absence of factors that probe to support the strengthening of the Euro.
The price re-hovered in the resistance zone range 1.21800-1.21500 as tested in last week’s trading.
It is likely that the price will have some difficulty in penetrating the zone due to the upside momentum is not very encouraging.
However, if the price manages to pass the zone, the price is expected to continue rising higher towards the level around 1.22500 to test the resistance in February.
On the other hand, if the bearish situation occurs again after the price still fails to break the current resistance zone, the price is seen to return to the RBS zone (resistance become support) 1.20900-1.20600.
The lower decline will lead to the focus support zone at 1.20000 but will require strong factors to support the re -strengthening of the US dollar in the market.
