Continued to give room for most major currencies to appreciate in New York session trading yesterday following the market reaction to Jerome Powell's comments in the event of the nomination of the Federal Reserve (Fed) chairman for a new term.
Powell explained that the United States (US) economy is ready for an increase in interest rates as well as a reduction in bond purchases to offset inflation. However, he said policymakers were still in discussions to reduce the balance sheet and needed several more meetings before a decision could be made.
Market players interpret Powell's speech to be less hawkish than ever and make the US dollar depreciate ahead of today's US inflation data report.
Therefore, it can be observed that the price movement on the chart of the EUR/USD currency pair on Tuesday yesterday still continued its bullish pattern taking advantage of the narrowness of the US dollar.
A 60 pips jump in the New York session from the level around 1.13130 to the high of 1.13750 to record a weekly high.
The price movement that remains above the support level of Moving Average 50 (MA50) signals for the price to continue rising higher with the expectation that the resistance zone at 1.14000 will be tested.
Will the price be able to break the resistance to record the latest high after 8 weeks?
On the other hand, if the price plummets again, it is likely that the market has a positive reaction to the US dollar following tonight's inflation data, the price may turn back to start a bearish trend.
The decline will go to the support zone 1.12500-1.12400 first before continuing the lower decline to the focus support zone of 2021 which is at 1.12000.
