The US dollar is seen to have returned to its strengthening track after concerns over the threat of the spread of the Omicron coronavirus variant again made investors wary and spurred demand for safe-haven currencies including the US dollar.
Earlier, the market saw the US dollar depreciate after the results of a hawkish FOMC meeting last week when the Federal Reserve (Fed) announced to accelerate measures to reduce bond purchases (tapering).
Meanwhile, the Euro managed to steal the opportunity to strengthen against the US dollar after the decision of the European central bank (ECB) meeting.
Thus, the price movement on the chart of the EUR/USD currency pair last week has recorded a rise to the high level of 1.13600 on Thursday with a jump of around 140 pips from the previous day’s low.
Yet on Friday, the price again made a decline again with a daily decline of around 110 pips closing the trade around 1.12400.
Investors will return to expect a lower decline to occur this week in anticipation of a re -strengthening of the US dollar.
However, the price support zone at 1.12500-1.12400 needs to be passed first after a few weeks the zone manages to curb the price fall.
The lower decline will see the lowest price zone for 2021 of 1.12000 will be tested whether successfully broken to record the latest lows or vice versa.
If the price increase does, last week's high level becomes the initial target for the price after giving the initial signal of a change in the bullish trend again.
The next rise is expected to test the focus resistance zone at 1.14000 after several weeks of prices falling below that zone.
