The New York session last Friday witnessed the strengthening of the US dollar which has reacted to the inflation data of the United States (US) published.
The reading of the producer price index (PPI) came with an increased number, in line with the reading of consumer inflation published earlier and further strengthened the expectation that the Federal Reserve (Fed) will not cut interest rates in March.
But the strengthening of the US dollar was seen to ease again as trading headed towards the closing end of the last session last week saw a depreciation of the currency king.
Noticed on the chart of the EUR/USD currency pair last week, a significant price plunge occurred on Tuesday when consumer inflation data was published.
However, the price held at the support level of 1.07000 which was seen to fail to be broken lower.
A rebound in price was shown until the close of the week's trading heading back to the SBR (support become resistance) zone at 1.08000.
Gives an early signal for a bearish movement when the price has started to move above the Moving Average 50 (MA50) support line on the 1-hour time frame on the EUR/USD chart.
Price movement remained slow to start the week's early trading in the Asian session this morning below the 1.08000 zone with price reactions around that area to be watched.
If the price manages to make an increase beyond the zone, the price will have more potential to extend the increase higher.
The target is to return to the height of 1.09000 which became the resistance zone for the price to be tested in early February.
However, if it doesn't happen, the price that fails to break through the 1.08000 zone is at risk of falling back down.
A break below the MA50 support will push the price to reach the 1.07000 support again.
