The arrival of the Speaker of the House of Representatives of the United States (US), Nancy Pelosi in Taiwan has lifted the market movement yesterday due to the renewed tension between China and the US.
Market risk-off sentiment has prompted a re-strengthening of the US dollar as a safe-haven currency while investors are also cautious ahead of the release of US NFP jobs data on Friday.
Take a look at the price action on the EUR/USD currency pair chart yesterday, the price seen has shown weak momentum since the rise at the beginning of the week and then plunged again after failing to touch the resistance level at the height of 1.03000.
The price has made a daily decline of around 120 pips up to the focal support level of 1.06000 at the close of trading in the New York session.
Signaling a bearish trend change again, the price has moved back below the Moving Average 50 (MA50) barrier level on the 1-hour time frame on the EUR/USD chart.
The continued price movement in the Asian session this Wednesday morning saw the price flat at the 1.01600 level with an expected tendency for the price to continue falling lower due to market risk sentiment factors.
The further drop in price is seen to test the 1.01000 level in the RBS zone (resistance becomes support) and it is expected that the price reaction will be monitored by investors in the zone.
The continued decline in prices will lead back to the main support zone at 1.01000 on a more obvious bearish movement.
On the other hand, if the situation changes, a possible rebound is seen to test the initial resistance at the 1.02400 level before returning to the 1.03000 zone that has yet to be breached this week.
A higher rally if it continues beyond the zone will record the latest 4-week high with a focus resistance target at 1.04000.
Investors are wary of risky market sentiment while focus will shift to the US NFP jobs data report at the end of the week.
