After a flat price movement from the first session of the opening early this week, finally a clear direction has been displayed driven by the latest published data.
In the focus of the New York session yesterday, the US consumer price index (CPI) for June recorded an increase to 2.7%, higher than the forecast of 2.6% and the previous month's reading of 2.4%.
Expectations that the Federal Reserve (Fed) will not rush to continue cutting interest rates have also driven the attraction towards the US dollar.
Thus, it can be observed that a significant movement occurred on the EUR/USD currency pair chart yesterday.
The price that previously hovered below the 1.17000 zone plunged down and reached the focus level at 1.16000.
Testing the important level, the price slowed down and closed the New York session trading around it and showed a weak increase at the opening of the Asian session this morning (Wednesday).
With yesterday's plunge, investors will expect further declines to occur, but will likely be cautious ahead of the US producer inflation report in the New York session tonight.
The price action that failed to rise above 1.17000 and was limited below the Moving Average 50 (MA50) resistance line on the 1-hour chart has maintained a bearish signal.
A lower decline below 1.16000 will shift to a new target in the 1.15000 zone.
On the other hand, if the situation changes and there is a rebound in price, the 1.17000 level is likely to be the target for retesting as it has been trading since last week.
A higher rise could provide a clearer signal for a change in the bullish price trend and target the 1.18000 resistance zone again.
