After moving somewhat flat in the Asian and European sessions yesterday, the US dollar was seen continuing its decline in the New York session with several factors being noted by investors following the volatile movement of the US dollar this week.
Supporting the strengthening of the US dollar, US treasury yields showed an increase above the 1.30%level. In addition, the U.S. Food and Drug Administration reportedly has fully approved the Covid-19 vaccine by Pfizer and BioNTech which is seen to accelerate economic recovery.
Still, pressure remained on the US dollar until the end of the New York session yesterday as investors were wary ahead of the annual Jackson Hole rally event this weekend.
Investors will focus on a speech by Federal Reserve (Fed) Chairman Jerome Powell for the latest indications on bond -tapering measures that have been a hot topic in the market in the past.
If you look at the chart of the EUR/USD currency pair in Wednesday's trading yesterday, the price initially seemed to show signs of making a decline again after the surge was exhibited at the beginning of the week.
Instead it just dropped to a level around 1.17300 before soaring again to hit this week’s high of around 1.17700 until the end of the New York session.
The slow return price movement continued in the Asian session this morning (Thursday). However, the price is still giving a bullish signal with the price movement remaining above the support level of Moving Average 50 (MA50) on the 1 hour time frame on the EUR/USD chart.
The continued rise is seen to test the focus level at 1.18000 which was the resistance for the price increase in the previous week.
A higher price increase on the bullish trend beyond the resistance will lead to a high of around 1.19000.
On the other hand if the price continues to rise higher and returns to decline again, the level of 1.17000 will be the initial level for price support.
A lower decline will test last week's support level around 1.16700 before heading to the 1.16000 support zone for a continued decline.
Investors will focus on the latest readings of US GDP growth data for the second quarter to be published in the New York session that will affect the movement of the US dollar.
