Does the euro have the potential to overtake the USD again this week?
There is no doubt that there are supporting factors for the strengthening of the Euro this week while the US dollar is still moving weak at the market opening earlier in the week.
Market players expect that an interest rate hike will be implemented by the European Central Bank (ECB) at a policy meeting this week after several signals delivered by President Christine Lagarde, and will be a supporting factor for the Euro’s rise.
However, the uncertainty of the gas issue involving the Nord Stream 1 pipeline in Europe is seen to limit the positive movement for the Euro.
Meanwhile, the US dollar is expected to strengthen again if the market's focus is redirected to expectations of an interest rate hike by the Federal Reserve (Fed) for next week's FOMC meeting.
Fed members signaled for a rise of 75 basis points like the previous meeting, but did not see a rise of up to 100 basis points as has been implemented by Canada’s central bank.
Examining the price movement on the chart of the EUR/USD currency pair, the price displayed a bullish pattern again at the end of last week after hitting the latest 20 -year low.
Last Wednesday, the price had hit around 0.99530 before rising until the last session of last week hovered again at the level of 1,000.
The price moved slowly around the 1,000 at the market opening earlier this week after early signals of a bullish trend change were assessed by investors at the close of trading last week.
If the rise is successful, the price is seen to test some previous focus levels such as around 1.01600 and 1.02400 before heading to the 1.03000 level for a more bullish movement.
But on the other hand, if the price continues to decline from the level of 1.0000, the lowest level reached 0.99530 last week is likely to be overcome again.
Prices that continue to decline will continue to hunt for the latest 2 -year record lows with the next target likely to hit up to around 0.98000.
