The FOMC meeting last week has pushed the strengthening of the US dollar witnessing the Federal Reserve’s (Fed) decision towards policy tightening.
However, the US dollar failed to maintain its strengthening momentum after the meeting due to several factors in the market that are expected to put pressure on the US dollar to continue in trading earlier this week.
Among them is the Evergrande crisis which shows progress and eases concerns and the issue of the release of Huawei CFO detainees which eased tensions between China and Canada.
Investors will assess whether the U.S. dollar will move weakly in reaction to the factors influencing the safe-haven currency, or even refocus on policy tightening by the Fed.
On the price chart of the EUR/USD pair, the price is seen still moving horizontally above the support zone of 1.17000 until the end of last week.
Although there were attempts for the price to drop lower below 1.17000 during the FOMC meeting, the price rebounded above that level.
The Euro also failed to take advantage of the depreciation of the US dollar over the weekend as published European economic data also recorded a less encouraging reading.
If the price rises on the EUR/USD chart, the initial resistance that will be tested is in the SBR zone (support become resistance) 1.17500.
Next, the bulls will test the resistance level at 1.18000 after the price fell below that level in the last 2 weeks of trading.
For the falling price situation, the price moving below the support zone 1.17000 is seen as a signal to continue the bearish trend.
The next support zone at 1.16000 will be the price focus level that will be tested as well as record the latest low level for this year.
