The movement of financial markets since the beginning of the week is still seen to be slow with mixed market sentiment.
Still, the US dollar has given little signal to start strengthening again after the focus of market players is likely to have re -directed to policy tightening measures by the Federal Reserve (Fed).
The majority expects an interest rate hike of another 50 basis points by the Fed at the September meeting, two expectations for the November meeting of 50 or 25 basis points, as well as an additional 25 basis points at the December meeting.
Still, it is too early to say that the strengthening of the US dollar has begun and it is likely that the king of the currency could remain a dismal performance throughout the week.
Examining the price movement on the chart of the EUR/USD currency pair yesterday, there was a higher price increase than last Monday, with the high level reached around 1.05800 before the decline repeated until the end of the New York session trading.
Continuing in early trading of the Asian session this morning (Wednesday), a slight decline heading back to the 1.05000 zone has given an early signal for a bearish trend change after the price moved below the Moving Average 50 (MA50) barrier level on the 1 -hour time frame on the price chart.
If the US dollar manages to add strengthening momentum to today's trading, the lower price drop below the 1.05000 zone is seen to head back to the 1.04000 support zone which was an important trading zone last week.
A lower drop below the support zone will record the latest price low for 20 years, with the target heading around 1.03000.
On the other hand if the price manages to make a rebound from the 1.05000 zone, the resistance zone at 1.06000 will be the next focus to be tested and the price will surpass the high reached yesterday.
A higher rise passes the zone and displays a bullish trend movement, the price can reach up to the high level at 1.07000 or higher towards the resistance at 1.08000.
