The US dollar further eased pressure in financial markets as its continued depreciation in Tuesday’s trading continued to open up space for other major currencies in the market to rise higher.
The gloomy movement of the US dollar at the opening of trading earlier this week was driven by the reading of US retail sales data for April published with declining figures.
The speech by Federal Reserve (Fed) Chairman Jerome Powell did not surprise investors, he reiterated the central bank is comfortable with a 50 basis point increase in interest rates. The fact makes the momentum of the strengthening of the US dollar before this is fading for now.
Meanwhile, a member of the European central bank (ECB), Klass Knot, said that a 50 basis point increase in interest rates cannot be ignored if inflation continues to rise. He also said a 25 basis point increase in July was realistic.
This is also seen as a factor supporting the price spike on the EUR/USD currency pair chart yesterday in addition to the prolonged depreciation of the US dollar.
After the price rose from the 1.0400 level on Monday, the rise continued yesterday until it passed the 1.0500 resistance zone with the daily rise recorded around 120 pips.
Analysts also saw clearer trend change signals after the early week movement of prices that were above the Moving Average 50 (MA50) support level on the 1 -hour time frame.
The higher upside target if continued is towards the resistance zone at 1.06000 after the zone was also tested at the release of the NFP data report and the last FOMC meeting.
But investors need to be careful if the US dollar regains its strength and pushes prices back low.
The decline is expected to re -head to the earlier focus level of the week at 1.0400 before testing the price lows hit last week around 1.0350.
The lower decline for the latest 5 -year low is seen to be around 1.0300.
