The Euro currency showed strengthening against the US dollar in the European session yesterday supported by the release of positive European economic data.
Updated readings of European economic growth data for the third quarter have injected some strength into the Euro after a dismal move earlier in the week.
Meanwhile, the US dollar showed a depreciation in the European session when the focus was on the report of the development of Covid in China when the general government will end the zero-Covid policy and use other methods to contain the spread of the virus.
However, the US dollar was seen slightly stronger again in the New York trading session as concerns engulfed the market with the threat of nuclear war by Russian President, Vladimir Putin.
Thus, it can be observed that the price movement on the chart of the EUR/USD currency pair yesterday which was initially flat in the Asian session hovered above the 1.04500 level and then displayed a surge in the European session.
The rise in price has crossed the important zone of 1.05000 and reached a height around 1.05500 indicating a daily increase of 100 pips in price.
However, continuing in the New York session, the price retreated again before leveling off at the 1.05000 level until the early opening of the Asian session this morning (Thursday).
The price that has moved above the Moving Average 50 (MA50) level on the 1-hour time frame on the EUR/USD chart gives an early signal for a change in the price trend, but investors are still wary of the uncertain movement towards the end of the week.
If the rise is successfully pushed from the 1.05000 zone, the resistance zone at 1.06000 will still be the focus to be tested after the rise earlier in the week failed to break through it.
Breaking through that resistance will push the price to reach a higher target level around 1.07000, setting a new 6-month high.
However, should the price plunge again below the 1.05000 zone and break through the MA50 support, further declines are expected.
The price is likely to break above the 1.04500 level hit yesterday before heading to the next focus level at 1.04000.
