The US dollar started trading at the beginning of the market opening this week with a right step as it recorded a strengthening in the Asian session influenced by market sentiment which was assessed risky.
Concerns over the spread of Covid-19 infection are growing, putting pressure on high-return currencies while safe-haven currencies such as the US dollar have the advantage to strengthen in this situation.
Thus it can be seen that the US dollar showed an early strengthening against other major currencies in the market, but investors are still vigilant waiting for the opening of the European and New York market sessions.
The price chart of the major currency pair EUR/USD shows the price movement is still slow and the advantage of the US dollar at the beginning of the market opening slightly pressed the price to move above the important level of 1.18000.
This level is seen as a price support zone after a few weeks of price decline managed to make a rise again after reaching the zone.
Last week’s bullish pattern failed to be sustained before the price fell back to the 1.18000 support zone and a decline below the Moving Average 50 (MA50) barrier level on the 1 hour time frame began to signal for a bearish trend.
Investors will first wait for the price reaction in the 1.18000 zone earlier this week to see if the price will make a rise or break lower.
The tendency for prices to fall lower will be driven by investor vigilance factors towards the Euro currency ahead of the European central bank’s (ECB) monetary policy meeting this week.
In an effort for the central bank to support the economic recovery, expectations for the ECB to continue to maintain a loose policy will continue to put pressure on the Euro.
The decline could reach up to the latest support zone around 1.17200-1.17000 while recording the latest low since last April.
On the other hand, if the price manages to jump back from the support zone of 1.18000, the price increase is seen to go to the level of 1.19000 to test the SBR zone (support become resistance).
