After the US dollar managed to show its biggest weekly gain in 2 months last week, the king of the currency returned to decline significantly at the opening of trading earlier this week.
Concerns over the latest wave of Covid-19 that hit are seen as hampering the Federal Reserve's (Fed) 's proposed implementation of a reduction in bond purchases (tapering) and prompting a further depreciation of the US dollar.
Witnessing weak movements since the Asian session began yesterday, the US dollar continued to move gloomily into the New York session in addition to the release of US manufacturing and services sector data with less encouraging readings.
Opening room for other major currencies to rebound, the Euro managed to take advantage even though economic sector data published in the European session looked less than satisfactory.
On the chart of the EUR/USD pair, the price which started to rise above the level of 1.17000 at the beginning of the Asian session yesterday continued to rise until the end of the New York session reached a high level around 1.17500.
With the increase in addition to the price movement above the support level of the Moving Average 50 (MA50) on the 1 -hour time frame gives an indication to investors for a bullish movement.
A successful continued rise is seen to lead to the resistance level of 1.18000 which was tested at the beginning of last week’s trading.
If the price jumps higher to break the resistance, the price increase is expected to head to the level of 1.19000 and record the highest level in 3 weeks.
However, if the price starts to change direction possibly with the re -strengthening of the US dollar in the market, a decline below the 1.17000 level and the MA50 support level will give a bearish signal.
The price will test last week’s support level around 1.16700 before a continued decline is expected to the 1.16000 level and record the latest low for the year.
