Market movements on Tuesday yesterday were judged to be mixed with concerns still focused on the debt ceiling issue as well as published economic data.
The US dollar moved mixed with the strengthening shown in the Asian and European sessions, but again weakened slightly in the New York session after the market reaction to the United States (US) manufacturing and services PMI data was published.
Thus, the US dollar failed to maintain its strengthening momentum and retreated from the 2-month high level that it successfully achieved.
The PMI data published for Europe in the previous session was seen to also display gloomy figures and have a weakening effect on the Euro currency.
If you look at the price chart of the EUR/USD currency pair, after a horizontal movement was displayed throughout last Monday, the price started to move down yesterday below the 1.08000 level.
The movement below the Moving Average 50 (MA50) barrier level on the 1-hour time frame on the EUR/USD chart also gives a bearish signal for the price.
As expected, the decline re-hit last week's lows around 1.07600 before slowing around that until the end of the New York session.
Slow movement continued in the Asian session this morning (Wednesday), but the downward trend in prices is expected to continue.
A lower drop will lead to the next target at support around 1.07000 while also recording the latest 9-week low.
However, if the US dollar weakens more significantly after this, watch if the price rebound reaches the 1.08000 level again.
If the price breaks above the MA50 barrier as well, this will give an early indication of a trend reversal.
The price increase can be targeted towards the 1.09000 zone before continuing to the previous target level of 1.10000.
