After a flat move throughout Monday's opening market trade earlier in the week, there was a surprise at the start of the European session on Tuesday yesterday with drastic price movements.
The US dollar stood out with the strengthening that buried most of the major currencies although there were no clear factors supporting the situation with a highly volatile market environment.
Investors are likely to expect details of the FOMC meeting minutes to be published early Thursday morning with signals for several more rate hikes this year.
In addition, the market is also increasingly wary of fears of a new wave of Covid-19 transmission as cases are reported to be increasing following the easing of movement restrictions in China.
The Euro currency showed its worst fall since last September due to the strengthening pressure of the US dollar yesterday in addition to the German inflation data being published which is decreasing.
On the price chart of the EUR/USD currency pair, the price initially moved slowly around 1.07000 in the Asian session.
Early indications of bearish trend movements were evaluated by investors when the price was below the Moving Average 50 (MA50) barrier level on the 1-hour time frame on the chart and the price also tested that level for a while.
A clear decline in prices took place in the European session until it crossed the support zone at 1.06000, seeing the price manage to get out of the sideways zone for a few weeks.
After reaching the 1.05200 level, the price bounced back to the 1.06000 level before closing the New York session trading around 1.05500.
With the bearish pattern displayed, the price is expected to continue its decline towards the support level at 1.05000.
If successfully broken, the price is likely to extend the decline reaching the 1.04000 concentration zone to record a recent 5-month low.
On the other hand, if there is another surge in price until it passes the 1.06000 level, the MA50 barrier will be tested before the price gives a signal for a trend change.
A further rise if continued is seen to lead back to the resistance zone at the height of 1.07000 reached at the close of trading last 2022.
