Market sentiment which remained gloomy at the beginning of the week still saw a strengthening by the US dollar despite a slight decline in trading between yesterday’s sessions.
The attraction of safer investors gives the US dollar an advantage in the market despite a bit of a struggle to compete with other safe-haven currencies.
In addition to investors' optimistic views on policy tightening measures by the Federal Reserve (Fed), the US dollar was also driven by a surge in US 10-year treasury yields to 2.8%.
Investors will however be cautiously awaiting the release of US inflation data in tonight’s New York session.
On the price chart of the EUR/USD pair, the price is seen moving horizontally around the 1.09000 focus zone for the start of trading earlier this week.
There is an early signal for the price movement to change direction to make a rebound when the price starts moving above the Moving Average 50 (MA50) support level on the 1 hour time frame.
Yet investors are waiting for clearer signals for the direction of further price movements after displaying bearish trend movements last week.
Investors are also wary of Euro trading ahead of the European central bank's policy meeting this week. Meanwhile, in the European session soon, German economic sentiment survey data will also be monitored by investors.
If the price decline continues, the support zone that will be tested is at 1.08000, which is the zone that once supported the price in March trading last year after the price declined to record the latest lowest level since May 2020.
If the decline continues lower, the latest target is around 1.07000 for the decline to hit the latest 2 -year low.
On the other hand, if a price increase occurs, the initial resistance that will be tested by the price is at the level of 1.1000.
And the next higher rise will lead to the resistance zone at 1.12000 which was the focus before.
