The publication of US inflation data, which surpassed expectations and the highest in 3 decades, continued to support the USD to strengthen significantly in the performance of the New York session yesterday.
The issuance is likely to boost support for the Federal Reserve (Fed) to pursue policy tightening measures after announcing a tapering reduction at last week's FOMC meeting.
The strengthening of the USD was also led by slightly risky market sentiment following the Evergrande issue coming back hot at this point which further increased the attraction to the king of the currency as a safe-haven currency.
Judging by the price chart of the EUR/USD pair, the price seems to come out fiercely with a plunge above 100 pips to destroy the previous support barrier at 1.15000.
At the opening of the market, the price movement only hovered at the level of 1.16000 in the Asian session yesterday (Wednesday) before starting to give a bearish reaction at the beginning of the European session until the end of the session.
That is, the impact of the decline has created the latest low for 2021 around 1.14750 and the zone is also the lowest level since July 2020 trading.
If the price continues to gain a boost from the strengthening USD to a more severe decline, the next support zone at 1.14000 is expected to be a new focus for investors.
The price movement will also strengthen investors' expectations to see the price on the EUR/USD chart to maintain the bearish trend following the positive momentum from inflation data.
If the price manages to return to the upside, first of all investors may see a surge to test the SBR (support become resistance) zone of 1.15000 before continuing to climb.
A higher climb will see the price movement re -reach the SBR 1.16000 zone which is currently seen as the hardest zone to break in a few weeks.
