The US dollar has exhibited weak movements since the beginning of the week and continued to decline after Federal Reserve (Fed) Chairman Jerome Powell signaled to maintain loose monetary policy.
Until yesterday's European session, the US dollar remained weak. However, towards the end of the New York session the US dollar was seen to strengthen again.
This follows discussions for a return to policy tightening when 2 Fed officials view the high inflation rate in the United States (US) is likely to continue for a longer period and expect interest rates to be raised by the end of 2022.
In addition, the US dollar was also supported by the release of US manufacturing and services PMI data in the New York session with a good reading despite a slight decline in the services sector.
Thus it can be seen that the price movement on the chart of the EUR/USD currency pair showed a decline in price again after the rise in the European session reached almost to the level of 1.19700 before making a decline.
The rise in the European session was also supported by European manufacturing and services PMI data published with positive readings supporting the movement of the Euro currency. However, the upward momentum failed to be maintained.
The decline returned to the Moving Average 50 (MA50) support level on the 1 -hour time frame on the EUR/USD chart which still gave the price signal to make a rise with the slow moving price continuing in the Asian market session this morning.
If the bullish pattern is still managed, the price will pass yesterday's high before testing the resistance level at 1.2000.
The level needs to be passed by the price to continue the rise on the bullish trend towards the SBR zone (support become resistance) 1.20600-1.20900.
However, if the strengthening of the US dollar continues, the price will make a decline below the MA50 before continuing to decline below the 1.19000 level for a bearish trend signal.
Next, the weekly support level at 1.18500 will be tested before further decline is seen to the focus support zone at 1.18000.
The focus for the US dollar today will be on the release of US GDP growth data for the final reading for the first quarter of 2021.
