The US dollar traded weak again in the New York session yesterday after the market reacted to the latest US inflation report published.
The annual US consumer price index (CPI) reading for July missed expectations to rise to 2.8% but remained at 2.7% as in the previous month.
The market's renewed expectations for an interest rate cut by the Federal Reserve (Fed) at its September meeting led to a decline in the US dollar, which erased gains made earlier in the week.
On the EUR/USD chart, the price, which had leveled off slowly above the 1.16000 level in the European session yesterday, then jumped sharply as soon as the US CPI data was published in the New York session.
The price returned to the 1.17000 level but, as in the situation last week, the resistance level still prevented further gains.
Prices ended the New York session slow and remained hovering below 1.17000 at the opening of the Asian session this morning (Wednesday).
A surge above the Moving Average 50 (MA50) line on the 1-hour time frame on the EUR/USD chart signals a bullish move.
If the US dollar continues to trade weakly, prices will rise above the 1.17000 resistance before recording a new 6-week high.
The next target is for prices to reach the resistance zone at 1.18000, which was tested at the end of June.
On the other hand, if prices fail to continue rising, a decline could occur for prices to re-approach the current support level at 1.16000.
A further decline if extended could lead to around 1.15000 or even the previous week's support zone at 1.14000.
