January 3, 2022

EUR/USD Reaches 6 -Week High At The Close Of 2021

 The price movement on the chart of the EUR/USD currency pair managed to reach the latest 6 -week high!

The rise was reached at the close of 2021 trading last Friday in the New York session driven by the factor of depreciation of the US dollar until the end of the session.

In addition to low liquidity in the market, profit taking activity is expected among market players with the US dollar projected to strengthen again in 2022.

This is following hawkish signals by the Federal Reserve (Fed) at previous policy meetings to accelerate the reduction of bond purchases (tapering) as well as expectations for an accelerated interest rate hike.

The opening of the market at the beginning of the new year, in the Asian session on Monday morning saw the price decline again after the high level around 1.13850 was successfully reached at the close of trading last week ending 2021.

The decline is expected to test the support level of the Moving Average 50 (MA50) in the 1 hour time frame of the price movement on the EUR/USD chart as a signal for the rebound price to make a rebound or make a lower decline.

If a lower decline occurs, the support zone at 1.12500 previously will be tested again after the zone managed to support the price increase for several weeks.

The continued decline will test the key support zone at 1.12000 which is the lowest price zone in 2021.

As for the upside, the resistance zone at 1.14000 is still an important resistance to test the price before continuing to rise to higher levels.

The higher high seen at 1.14500 which is 50 pips higher will be the focus if the resistance at 1.14000 is successfully broken.