The US dollar suffered a decline in trading on Tuesday yesterday as analysts were still assessing the impact of the United States (US) debt ceiling agreement that was successfully reached last weekend.
However, market players are still not very confident and are waiting for the results of the vote in the House and Senate before the agreement is signed.
The focus is seen to shift first to the publication of key US economic data towards the end of the week which has made investors wary.
Adding to the pressure on the US dollar is the gloomy outlook for all components in the US NFP jobs report to be published on Friday.
The US dollar weakened significantly in the European session yesterday, but recovered slightly in the New York session with the release of better-than-expected US consumer confidence data.
Looking at the price action on the chart of the EUR/USD currency pair, a low was recorded close to 1.06700 before a 70 pips bounce was displayed.
Back above the 1.07000 level again, the price also crossed the Moving Average 50 (MA50) barrier on the 1-hour time frame on the EUR/USD chart to give an early signal to start the bullish movement after this.
The high level was reached around 1.07450 before the price retreated slightly testing the MA50 support level and finally closed the New York session trading around the 1.07300 level.
Investors are set to see further gains continue today (Wednesday) if the US dollar remains weak towards the end of the week.
The increase is targeted to the level of 1.08000 which will be the initial resistance to be tested before the price that breaks through higher will go to the concentration zone of 1.09000.
However, if the price falls back below the 1.07000 level, it is likely that the latest low will be recorded again.
A further drop in price is seen to reach around the 1.06000 level as the target of the latest support zone.
