EUR/USD Continues Downtrend Ahead of US NFP Report

 The US dollar managed to maintain its strength on Wednesday's trading yesterday although the previously risky market sentiment began to subside after the representative of the United States (US) Nancy Pelosi had already left Taiwan.

Supporting the strengthening of the US dollar, speculation for the Federal Reserve (Fed) to maintain a 75 basis point increase in interest rates came into focus following some Fed officials' view that the central bank could not yet stop its previously aggressive policy tightening.

In addition, survey data for the US services sector published in the New York session yesterday was rated well following readings for the manufacturing sector earlier in the week, signaling that the US economy is absorbing recessionary pressure.

Assessing the price movement on the chart of the EUR/USD currency pair, the price maintained a bearish pattern on Wednesday yesterday after a significant plunge was displayed last Tuesday.

A bearish signal for the price with a move below the Moving Average 50 (MA50) barrier level on the 1-hour time frame triggers expectations for a further decline towards the end of the week.

The price has slipped past the 1.01600 level, hitting daily lows around 1.01220 in the New York session yesterday but is seen rebounding to close the end of the session around 1.01600 again.

A lower price drop is expected to head towards the 1.0100 level to test the RBS (resistance become support) zone and investors will assess the price reaction for further movement indicators.

A further decline for the continued bearish movement is seen to reach the support zone again at 1.0000.

On the other hand, if the price makes an increase beyond the MA50 barrier, the resistance at 1.02400 will be the focus to be retested.

A continued rise into a key resistance zone will be assessed before the price breaks above the 1.03000 level to record a new 4-week high with the next target heading towards the 1.04000 level.

Investors will be cautiously awaiting the release of the US NFP jobs data report on Friday which will influence price movements.

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