Risk sentiment continues to flood the market at the moment as the crisis facing Evergrande remains haunting investors after its shares were suspended during a trading session in Hong Kong today.
These factors will give little support to the US dollar to strengthen but the price movement is still seen slow at the beginning of trading this week.
The release of the US NFP employment data report in September published on Friday is likely to support the strengthening of the USD in the wake of rising reading expectations.
Looking at the price chart of the EUR/USD pair, the price seems to have jumped aggressively to trade above the Moving Average 50 (MA50) barrier level on the 1 -hour time frame.
The rise also recorded an increase of over 40 pips and gave a clear indication for the price movement to make a bullish trend change.
The level of 1.15700 remains the lowest level and the latest support for 2021 where the level has already supported the price to return to record a surge.
If the head and shoulders pattern displayed in the 1 hour time frame at this point signals for a rise, the price is expected to break the SBR (support become resistance) zone of 1.16000 and rise higher.
A more convincing uptrend pattern will see the price re -test the SBR zone further around 1.17000 which is a support level that was tested several times before being successfully broken last week.
However, if current sentiment continues to disrupt the market, price movements are likely to hit the 2021 lows again at 1.15700.
The lower support zone around 1.15000 remains the focus level to aim for to complete the double top pattern that is still visible on the weekly price movement framework.
