The USD appears to be showing streaks to strengthen after receiving a boost from a speech by Federal Reserve (Fed) Chairman Jerome Powell at yesterday’s (Tuesday) New York session on tapering.
Powell has already announced a desire to speed up measures to reduce bond purchases which in turn will see the termination of bond purchases sooner.
So the market can expect the period for the tapering step to be completed soon at a time when the threat of Covid-19 contagion with the Omicron variant is spreading nationwide.
But looking at the price on the EUR/USD chart, it looks like it wants to maintain the resumption of last Friday's surge after flattening at the beginning of the week.
But the surge was completely refuted with a plunge of close to 150 pips in the New York session yesterday following reactions to Powell's speech before returning to climb at the end of the session.
The price movement also saw the price trade above the Moving Average 50 (MA50) barrier level for an early signal to a bullish trend ahead of the release of the US NFP data.
If the price on the EUR/USD chart continues to receive pressure to stay lower, the RBS (resistance become support) zone of 1.13000 is expected to be broken to further decline.
A sustained decline will see the price move towards the support zone of 1.12000 as well as the lowest level since July 2020 around 1.11900 is likely to be reached again.
On the other hand, if the price is able to continue the uptrend that is currently displayed, the SBR (support become resistance) zone of 1.14000 will likely be the focus zone for investors.
A higher rise will see the price move to the latest target in the next SBR zone at 1.15000 for a clearer bullish signal before continuing to climb.
