The US dollar ended last week's trade with a strong performance even though market analysts expected the currency to have a rough ride after key data was published.
Although the Federal Reserve (Fed) is seen to be heading towards policy easing which has pushed the US dollar to move weakly, the king of the currency remained bullish on most other major currencies until the end of last week.
Analysts see the market sentiment factor as a risk that makes the demand for the US dollar as a safe-haven increase, following the issue of the debt ceiling in the United States (US) which is still not resolved.
Thus, the US dollar still has the potential to remain strong this week, but investors need to be alert if there are signs for it to weaken again in the market.
Looking at the price chart of the EUR/USD currency pair, the price showed the biggest weekly decline since February with the Euro managing to fall to a 4-week low against the US dollar.
From the height of 1.10500 at the beginning of the week, the price has made a decline of 200 pips to the level of 1.08500 at the end of the week.
Price movement that remains below the Moving Average 50 (MA50) barrier on the 1-hour time frame on the EUR/USD chart will continue to expect the bearish trend to continue this week.
After the decline passed the important zone of 1.09000, the price is seen to continue the decline further towards the 1.08000 level.
Next, if the decline continues, the target will move to the 1.07000 level for a record 8-week price low.
If there is a rebound, the 1.09000 zone and the MA50 barrier will be tested and the price reaction will be watched by investors.
If the price manages to break through the following resistance, the initial expectation for the next bullish trend change is likely to see the price re-reach the important level at 1.10000.
