After a rather choppy movement last week, trading will certainly be more turbulent this week ahead of the highly anticipated FOMC meeting by investors.
The US dollar currency was seen to recover slightly last Friday after experiencing a significant decline the previous Thursday.
Expectations for the setting of monetary policy by the Federal Reserve (Fed) became more confusing when the Reserve Bank of Australia (RBA) and Bank of Canada (BOC) surprised the market last week by raising interest rates by 25 basis points.
As the inflation rate is still a concern for the central bank, the consumer price index (CPI) of the United States (US) will also be observed in the data that will be published on Tuesday.
The Euro currency last week managed to reach a 2-week high as the US dollar weakened.
The results of the meeting by the European Central Bank (EBC) will be scrutinized on Thursday with the expectation that interest rates will be increased by 25 basis points to 4.00%.
Looking at the price chart of the EUR/USD currency pair, the price has surged from the 1.07000 level to a height of around 1.07800 on Thursday.
However, price pulled back lower on Friday ending the last session trading around 1.07450.
On the 1-hour time frame on the EUR/USD chart, the price started to move slowly below the Moving Average 50 (MA50) line which shows an early signal for a bearish trend for the price.
A decline if lower earlier this week is likely to lead back to the 1.07000 focus level.
A further pullback will push expectations for the price to target the 1.06000 zone in addition to making new lows.
However if the price rebounds to make a rally again this week, the focus will be on the price testing the 1.08000 resistance zone that it failed to touch on last week's rise.
The increase that continues beyond the resistance is seen to return to the 1.09000 zone which was the focus of the price in the previous trade.
