Expectations for investors to see the strengthening of the US dollar heading into the weekend slumped again as a significant decline re -emerged in Wednesday’s trading yesterday.
Analysts assess the situation is driven by concerns over the risk of a recession in the United States (US) that makes the US dollar still move weak in the market.
A speech by Federal Reserve (Fed) Chairman Jerome Powell came into focus yesterday where he remained stressed that the central bank is committed to tackling high inflation that continues to boost investor confidence in continued interest rate hikes.
So is the signal for an interest rate hike up to reach the 75 basis point expectation for the European Central Bank (ECB) based on the votes of economists.
Thus, the Euro currency in Wednesday’s trading yesterday traded more brilliantly to rise against the US dollar.
On the price chart of the EUR/USD pair, the price is seen making an early decline in the Asian session testing the price support zone at 1.05000.
Then the price has turned around to bounce making a rebound up to the level of 1.06000 registering a daily increase of around 130 pips.
The high was a resistance to prices on last week's surge after market reactions following the FOMC meeting and also the ECB surprise meeting.
If the rally manages to continue today past the resistance, the higher rise is expected to head around 1.07000 to record the latest 2 -week high.
The continued move will lead to the resistance zone at 1.08000.
On the other hand if the price fails to break the resistance of 1.06000, the decline can happen again for the declining price to re -test the support zone at 1.05000.
A decline beyond that zone will give a bearish signal for the price to continue the decline up to the main support zone at 1.04000.
The release of economic data of the manufacturing and services sectors in Europe and the US will be assessed by investors today which could influence the movement of the Euro and US dollars.
