The US dollar still showed a dismal performance by moving lower to a 10 -week low in the New York session yesterday while the focus will be on US inflation data today.
Investors feared a high rise in inflation would hurt the value of the currency, but the Federal Reserve (Fed), which maintained policy easing, said the high level of inflation was only temporary and would not affect policy.
The momentum of the disappointing US NFP jobs report published last Friday is expected to drive a weaker movement of the US dollar this week. Yet an increase in U.S. treasury yields is seen re -offsetting the value of the U.S. dollar from the fall.
On the price chart of the EUR/USD pair, the price is seen rising around 50 pips once again testing the resistance of 1.21800.
Still failing to break it as it had the day before, the price receded to close the New York session trading lower around the 1.21500 price level.
The re -decline of the price below the Moving Average 50 (MA50) barrier level on the 1 hour time frame of the price is also seen as a signal for a bearish trend.
The US dollar moving slightly stronger in the Asian session this morning has seen an early decline exhibited on the EUR/USD chart.
Expectations for lower declines will head back to the RBS (resistance become support) zone 1.20900-1.20600.
The next lower decline will be to the support zone at 1.20000 which was also price tested in last week's trading.
However, if the US dollar continues to depreciate with the US-focused economic data recording a declining reading after this, the price is likely to jump past the resistance zone 1.21500-1.21800.
A higher rise will lead to the next target level around 1.22500 which is the resistance zone for the price in February trading.
