Price movements in the market on Tuesday trading yesterday remained uncertain with investor caution ahead of the release of United States (US) inflation data today (Wednesday).
The US dollar is seen continuing to strengthen for several sessions, but the momentum started to slow down again in the New York session yesterday.
Based on forecasts, the US consumer price index (CPI) for April is expected to remain unchanged at 0.5%, but there are forecasts for a lower figure.
The declining inflation rate will have a weakening effect on the US dollar, which will strengthen expectations for the Federal Reserve (Fed) to switch to a looser monetary policy.
Examining the chart of the EUR/USD currency pair yesterday, the downward pattern still continues to reach last week's lowest level.
The price started to decline from the 1.10000 level to around 1.09400 before leveling above it until the New York session ended.
The price movement still shows a bearish signal when it remains below the Moving Average 50 (MA50) barrier level on the 1-hour time frame on the EUR/USD chart.
If the price continues to decline, the support zone at 1.09000 is seen to be tested and its reaction will be monitored for investors to assess the further movement of the price.
Breaking lower will expect the decline to continue lower towards the target at 1.08000.
On the other hand, if the price jumps, the 1.10000 level will be retested and the MA50 barrier will also be tried to be broken by the price.
If the following resistances are successfully passed, it will be an early signal of a change in the bullish trend before investors expect the price increase to continue towards the previous resistance zone at 1.10800.
If the price increase continues, it will record the highest level since March 2022.
