Giving a surprise in the market, the US dollar rebounded in trading on Tuesday after a slow movement earlier in the week as the US market closed in conjunction with the Independence Day celebrations.
Risk-revalued market sentiment with the fall of the US stock market has prompted increased demand for safe-haven assets including the US dollar.
Moreover, investors are seen returning to focus on Federal Reserve (Fed) monetary policy again for the minutes of the FOMC meeting to be scrutinized early Thursday morning.
The focus for discussions on whether the Fed will initiate policy tightening measures is also seen as a factor supporting the re -strengthening of the US dollar in the market.
Although US treasury yields eased lower, and the US services PMI survey data published yesterday was also less encouraging, the US dollar remained on the rise.
It can be seen that the price movement on the chart of the EUR/USD currency pair, the price returned for a ‘U-turn’ again denying the previous price increase expectations.
Prices that continued to rise yesterday tested the resistance zone below the 1.19000 level before plunging all the way to the end of the New York session.
Being an early indication to investors, the price moving back below the Moving Average 50 (MA50) barrier level on the 1 -hour time frame on the EUR/USD chart signals for a bearish trend again.
The decline returned to the level reached last week with the support zone of 1.18000 seen to be the focus.
The zone will be tested and if the price manages to break lower, the lower decline is expected to head to the next focus level around 1.17200.
However, if the 1.18000 zone manages to curb the lower price fall and supports the rise again, it is likely that the price will return to the 1.19000 level.
