EUR/USD Down Momentarily 'Tests' the $1.0800 Zone Before Bouncing Up


The US dollar managed to show a good performance in trading sessions in Asia and Europe yesterday before the situation changed when trading moved to the New York session.

The latest data reading for the Gross Domestic Product (GDP) of the United States (US) for the last quarter of last year was slightly off the forecast.

Expectations are that the growth reading remained at 3.3%, but missed when the latest figure contracted to 3.2%.

This has had the effect of re-decreasing the US dollar and reducing the gains made in the previous sessions.

The focus will now be on the US consumer personal expenditure index (PCE) data that will be published in the New York session later tonight.

Examining the price chart of the EUR/USD currency pair, the price is seen to make an initial jump towards the 1.08000 concentration zone.

The RBS (resistance become support) zone that was tested was expected to display an attractive price reaction seeing the rebound happen again after the price hit it.

The price increase reached around 1.08400 but was blocked by the Moving Average 50 (MA50) line on the 1-hour time frame on the EUR/USD chart, which still gave a bearish signal for the price.

The horizontal movement at the end of the New York session continued until the opening of the Asian session this morning around that level.

If the move higher manages to continue beyond the MA50 barrier, last week's levels are likely to be reached.

Next, the 1.09000 resistance zone will be the focus to be tested while the reaction around it will be watched for indications of further price movement.

On the other hand, if the price drops again, the RBS 1.08000 zone will be tested again for investors to see if it still functions as a support when making prices.

If the price breaks down, a further decline can be expected to occur with the target moving to the 1.07000 level.