The US dollar posted a rise to a 2 -week high at the opening of the trading market earlier this week to maintain momentum at the end of last week.
Ahead of the FOMC meeting next week, investors are back to the view that the Federal Reserve (Fed) may exit its easing policy and do ‘tapering’ which is to reduce asset purchases.
The United States (US) inflation data to be published at today’s New York session will be a focus that can provide clues to the outcome of the FOMC meeting.
With the strengthening of the US dollar, the price on the chart of the EUR/USD currency pair has slipped lower in the European session yesterday hitting the level of 1.17700.
However, during the New York session, the price was seen rising again above the 1.18000 level but the rise was blocked at the Moving Average 50 (MA50) barrier level on the 1 -hour time frame on the EUR/USD chart.
Failing to get past the barrier still gives a bearish signal and investors will expect the decline in prices to resume.
If the price resumes the decline, yesterday's daily low will be passed before the price heads to the support level of 1.17000.
Yet if the price does not continue yesterday’s decline instead making a rise above the MA50 level, investors will see it as a signal of a bullish trend change for a higher price rise.
The price increase will lead to the resistance zone of 1.19000 which has been tested in previous weeks which still prevents the price to higher levels.
Passing the resistance zone will push the price up to the high of 1.2000 after the last time the price fell below that level in June.
