The US dollar was seen displaying gains in Tuesday's trading yesterday supported by several factors that were the focus of investors.
Market sentiment is seen to be back at risk with reports of a virus outbreak now spreading in Asia that will affect the global economic recovery. The US dollar as a safe-haven currency gains an advantage in this risk-off market situation.
U.S. consumer confidence data published in yesterday’s New York session also posted a strong reading for June, rising to a 16 -month high.
Apart from that, also in the spotlight was the optimistic speech by the Fed Governor, Christopher Waller who stated that the central bank should reduce asset purchases (tapering) as early as this year for action to raise interest rates next year.
Several of these factors are seen to provide support for the US dollar to resume its strengthening rhythm and put pressure on other major currencies in the market.
On the EUR/USD chart, the price is seen sinking lower below the 1.19000 level yesterday after the price tested the level the previous day.
The lows were hit in the New York session yesterday around 1.18750 before slightly rebounding to level around 1.19000 again until trading resumed into the Asian session this morning (Wednesday).
The price movement is still below the Moving Average 50 (MA50) barrier level on the 1 -hour time frame for the price signal to continue the downtrend.
With a slow movement pattern, the decline will be expected to test last week’s support level around 1.18500 before continuing the lower decline to the 1.18000 support zone.
The decline in prices to the zone will also record the latest 12 -week low.
On the other hand, if the price manages to make a rebound, last week's resistance level around 1.19700 will be tested before the price reaches the focus level at 1.2000.
For a higher rise will target the price towards the SBR zone (support become resistance) at 1.20600-1.20900.
