The US dollar was seen to begin to change the direction of its price movement on Wednesday yesterday when the decline from the beginning of the week did not continue, but instead began to show signs of strengthening again.
This is due to the news of the development of Covid-19 in China with reports of the largest daily spike in cases recorded yesterday for a period of 6 months, forcing the government to announce movement restrictions in additional districts of Guangzhou.
Influencing the risk-off sentiment factor of the market, the US dollar as a safe-haven currency began to show a re-strengthening, but investors remained cautious ahead of the release of the United States (US) inflation data published today.
It can be seen that the price movement on the chart of the EUR/USD currency pair on Wednesday yesterday started to change direction when the downward pattern was displayed.
The previous rise failed to break through the resistance at 1.01000, repeating the same situation that happened in the last week of October to make another decline.
The decline in price has returned to the parity level of 1.0000, but due to the drop below the barrier level of the Moving Average 50 (MA50) on the movement in the 1-hour time frame of the EUR/USD chart, investors consider it as an early sign of a change in trend.
If the price continues to drop lower today, passing the 1.0000 level next is seen to test the 0.95500 level which was the focus of last week.
Then, the price will continue to decline further to around the 0.99000 zone or even lower towards 0.98000.
On the other hand, if the price manages to jump from the parity level of 1.0000, the resistance at 1.01000 will again become a target to be tested.
After passing that resistance, the price will record the latest 8-week high to test the 0.16000 level before reaching the target level of 1.02000.
