The release of European manufacturing and services PMI data particularly focused on Germany published with encouraging readings at all has influenced the Euro currency to strengthen.
However, the strengthening still could not beat the dominance of the USD which continued to gain support from markets that were more attracted to the king of the currency due to risky market sentiment.
Thus, the strengthening of the Euro only lasted temporarily in the European session before a gloomy return on trading continued into yesterday’s New York session.
Adding to the injection of a strengthening USD was a sharp surge exhibited by the US 10-year treasury yield heading back to 1.70% as well as a gloomy global market index adding to the attraction of the USD as a safe-haven currency.
Slower price movement was displayed on the EUR/USD chart yesterday (Tuesday) compared to the beginning of the week with the price remaining hovering above the 1.12000 support zone which is also the zone of investor focus.
It seems that the price displayed an increase approaching 40 pips as it entered the beginning of the European session in reaching the Moving Average resistance level of 50 (MA50) on the 1 hour time frame before slightly declining.
The price pattern is still seen maintaining the downtrend pattern since the beginning of November with the expectation that the price movement is able to continue to plunge in creating the latest lows.
As a result, the 1.12000 support zone will remain the focus to be tested after the zone had previously supported the surge in June 2020 which is seen to continue to record the highest level.
While the next target will be observed in the support zone at 1.11000 which will make the latest low if the level of 1.12000 is successfully broken.
On the other hand, if the price movement returns to record a more aggressive increase, first the SBR zone (support become resistance) 1.13000 will be reached before the price is expected to be able to continue to rise.
An increase for the initial signal to a trend change will be observed if the price starts heading to the next SBR zone at 1.14000 to negate the downtrend exhibited during November trading.
