The US dollar was seen still moving weak in earlier trading this week driven by the fall in the 10-year US treasury yield which returned to the level of around 1.60%.
The start of the European session yesterday seemed to give hope to the US dollar by showing an early improvement after the focus returned to talks for a reduction in asset purchases urged by some members of the (Federal Reserve) Fed amid concerns over rising inflation.
However, the New York session again saw the US dollar move weaker again. The statement of Governor Lael Brainard, one of the Fed members became the focus stating that the Fed has a way to deal with inflation if it exceeds the target.
Thus, expectations for the US dollar to strengthen earlier this week returned bleak and reopened room for other major currencies in the market to rise.
On the chart of the EUR/USD pair, from last week until yesterday, the price was seen moving horizontally in the range of 100 pips below the resistance level of 1.22500.
The resistance level was tested several times in the last week but it is difficult to continue higher.
While the decline is supported in the RBS zone (resistance become support) 1.21800. The opening of the market earlier in the week yesterday also saw prices rise from the zone.
Investors are now vigilantly awaiting the latest signals for the direction of further price movements.
If the price manages to break the resistance of 1.22500, the bulls are seen to test the level of 1.22300 before continuing the bullish trend of the price and also recording the latest 4 -month high.
If the price plummets again, the RBS zone will be tested and investors will once again assess whether the price can be supported to make a rebound.
On the other hand, a decline below the zone will signal for a change in the bearish trend with the expectation for the price to head towards the lower RBS zone at 1.20900-1.20600.
