The U.S. dollar traded slightly mixed at the market opening earlier this week after a U.S. NFP jobs data report published last weekend was seen as failing to stimulate further strengthening of the currency’s king.
But analysts are of the view that the US dollar will strengthen again at any time as investors return to pay attention to the results of last week's FOMC meeting where the Federal Reserve (Fed) raised interest rates to 50 basis points as expected by the market.
Demonstrating serious steps in tackling soaring inflation, this will continue to drive expectations for continued interest rate hikes by the Fed for the remainder of the meeting until the end of the year.
The European currency displayed a slight increase against the US dollar in European session trading yesterday before returning gloomily in the New York session.
But investors remain wary of the Euro following the issue of Russian oil sanctions in Europe which remains a concern in the market.
The focus for the Euro will be on the ZEW survey report on German economic sentiment to be published at the European session shortly.
If we examine the price movement on the chart of the EUR/USD currency pair, the price hovered at the support zone 1.05000, which is the lowest price zone in 5 years, the rise was re -displayed in the European session yesterday.
Giving an early signal for a bullish trend change, the bulls have passed the Moving Average 50 (MA50) barrier level on the 1 -hour time frame and almost touched the 1.06000 high.
Despite showing a bullish pattern at the opening of trading earlier this week, prices are seen still moving in the sideway zone that continued from the end of last April.
The 1.06000-1.06400 zone tested during the market’s reaction to last week’s FOMC meeting and NFP report will be tested again this week in the event of a price hike.
For a higher rise, the price will head to the 1.07000 level before extending the rise to the 1.08000 zone for a clearer bullish trend movement.
On the other hand if the US dollar remains strong and presses prices lower, investors are likely to see the price hit the latest lows again after the decline past the 1.05000 support zone.
The further decline in the price for the latest record low is at the target of 1.04000 which is the support zone in December 2016 trading.
