Market sentiment is back to risk with several factors that are squeezing and giving an advantage again to safe-haven trades including the US dollar currency.
This situation is seen again in line with expectations for an increase in interest rates by the Federal Reserve (Fed) to maintain policy tightening measures in the face of high inflation with the risk of economic recession.
While developments in Europe are becoming increasingly critical regarding energy issues where Germany reported the giant Russian gas company, Gazprom limited gas supplies to Europe compared to normal capacity before.
This has prompted the decision for European countries to reduce gas consumption in winter, with a 15% reduction target for the next 6 months.
Added to the strengthening of the US dollar, the Euro was seen to experience a more significant depreciation on Tuesday compared to the horizontal movement displayed since last week.
On the price chart of the EUR/USD currency pair, the price hovering at the resistance level of 1.02400 yesterday has plunged almost touching the level of 1.01000 in the RBS (resistance become support) zone with a daily decrease of around 140 pips recorded.
After a flat movement at the beginning of the week, the price has started to show signs of a bearish trend change after falling below the Moving Average 50 (MA50) barrier level on the 1-hour time frame on the EUR/USD chart.
If the US dollar maintains its strength ahead of the FOMC meeting, the price will continue to decline below 1.01000 to reach the support zone at 1.0000.
On the other hand, if the price jumps again, it is possible after the reaction of the FOMC meeting results, the price will test the resistance at 1.02400 again.
And it is not impossible that the energetic surge in price can penetrate the high level of 1.03000 and will further target the rise to the latest level towards the 1.04000 zone.
