The wave of risks in the financial markets was again overshadowed by concerns over inflation and economic growth that kept US dollar trading mixed since the beginning of the week.
The United States (US) inflation data published in today’s New York session will be the main focus event of the market for this week.
Meanwhile, the latest current concern of investors is against a statement by the President of the Cleveland branch of the Federal Reserve (Fed), Loretta Mester stating that, not forever the option for a 75 basis point interest rate hike will be ignored.
Meaning, there is still the possibility for such a more aggressive interest rate hike could happen even if Fed Chairman Jerome Powell previously did not see the move as an option for the central bank.
Developments in Europe, the German economic sentiment data of the ZEW survey published yesterday still showed weak figures signaling an economic downturn in Europe.
Thus, it can be observed that the price movement on the chart of the EUR/USD currency pair yesterday showed a decline due to the movement of the Euro which remained weak even though the US dollar lost its strengthening momentum.
Still moving in the horizontal zone (sideway) since last week, the price support zone is still seen at 1.05000 which will be the focus in the event of another price decline.
The zone which is the lowest price zone reached in 5 years will be tested and if the lower decline continues, the price will record the latest lows again with expectations heading around 1.0400, which is the support zone in December 2016 trading.
However, if the published inflation data causes the US dollar to weaken, the price could rise again and investors would like to see if the resistance zone at 1.0600 can be penetrated by the price.
If the price jump is successful, the signal for a bullish trend change will push the expectation for the price to head to the previous target level around 1.07000 or higher at the 1.0800 zone.
