Market movements were driven by the release of United States (US) inflation data in the New York session yesterday which saw the US dollar continue to trade weakly.
The annual reading for the US consumer price index was in line with forecasts to decline to 6.0% in February, still high but moving towards the central bank's target level.
Therefore, investors are increasingly expecting that the Federal Reserve (Fed) will find it difficult to move into the policy tightening phase, after the market was also shaken by the crisis of the collapse of giant banks in the US.
The US dollar remained weak but the market reaction after the inflation data was published was more gloomy than expected.
It can be observed on the price chart of the EUR/USD currency pair moving relatively flat in the range of around 50-60 pips on Tuesday yesterday, hovering above the 1.07000 level.
Despite not breaking the high on Monday, the price remains above the support level of the Moving Average 50 (MA50) on the 1-hour time frame on the EUR/USD chart, indicating that the movement is still in a bullish trend.
The increase is expected to continue to the 1.08000 level to record the latest 4-week high.
Higher levels can still be reached, but investors are likely to be cautious awaiting the release of the US producer price index (PPI) data tonight.
Investors should remain prepared for changes in price direction while evaluating early signals that appear on the price chart.
If the price starts moving below the MA50 support level and crosses the 1.07000 level again, be prepared for the bearish pattern to start again.
For the expectation of a further decline, the price is seen to return to the concentration level of 1.06000 or go up to the support zone of 1.05000.
Investors will also be watching the movement of the Euro currency ahead of the European central bank (ECB) meeting on Thursday.
