The US dollar’s depreciation on resumed trading earlier in the week was seen opening up greater room for the Euro to rise higher ahead of the European central bank’s policy meeting this week.
With the expectation that the first interest rate hike in more than a decade will be implemented by the European Central Bank (ECB), the Euro currency has the potential to continue to appreciate in the market.
However, concerns over the energy crisis engulfing Europe at the moment are seen to be a factor limiting the Euro to show an outstanding performance.
The final reading of the European annual inflation data will be noted in European session trading this afternoon, however the market expects no change in the latest reading figures.
While investors are also wary of the US dollar's movement which began to show a rebound at the end of the New York session, a decline in the Wall Street stock market that reduced previous gains again increased risk in the market as well as giving a rebound to the US dollar.
Examining the price movement on the chart of the EUR/USD currency pair at the beginning of yesterday's week, the price still maintains the bullish pattern displayed since last weekend.
Having hit a 20 -year low last Wednesday around 0.99530, the price has made a continuous rise of around 240 pips on Monday yesterday with the high level reached in the New York session around 1.0200.
The change in the bullish pattern of the displayed price has gotten an early signal on the upside last weekend that passed the Moving Average 50 (MA50) level in the 1 hour time frame before the price continued to move higher past the 1.0100 level yesterday.
Yet the re -strengthening of the US dollar towards the end of the New York session has prompted a rebound in prices from the highs reached.
Continuing at the beginning of the Asian session this Tuesday morning, the price moved slowly around 1.01300 and is still rated moving in a bullish trend.
If the rally continues, the price is likely to surpass yesterday's high of 1.02000 and target to head to the level around 1.024000 or the next focus level at 1.0300.
On the other hand, if the price drops below the MA50 level and also passes the 1.0100 level, the expectation for a downtrend will re -emerge.
Next the price is expected to make a decline towards the important support zone between the 1,000 parity level and the lowest level reached last week at 0.99530.
