Stock market performance recorded a decline on Tuesday yesterday with European and United States (US) markets closing in the red. This is an indication of risky market sentiment for investors following growing concerns over the spread of the Delta variant Coronavirus which is hurting economic growth.
The aftermath of the risk-off sentiment has prompted a more significant strengthening of the US dollar as a safe-haven currency yesterday after giving early signals to strengthen earlier in the week.
In addition, the increase in US treasury yields close to 1.40% also supported the appreciation of the US dollar in the market.
After hitting a nearly 1 -month low last week, the US dollar again showed a re -strengthening against the Euro ahead of the European central bank (ECB) meeting this week.
On the chart of the EUR/USD currency pair, the price that managed to reach its latest high to the resistance level of 1.19000 at the end of last week started to show a bearish pattern this week.
The decline displayed yesterday saw the price have slipped to a daily low of around 1.18400 at the end of the New York session, lower than the price movement on Monday.
With the bearish pattern displayed is likely to push the price to the support level of 1.18000 to test the RBS zone (resistance become support).
If the outcome of the ECB meeting also adds to the pressure on the Euro, the price could slip lower below the 1.1800 zone further heading to the previous focus level around 1.17000.
On the other hand if market sentiment changes again and re -suppresses the movement of the US dollar, the price is likely to be able to make a re -rise testing the 1.19000 resistance zone reached last week.
A higher rise above the zone gives a positive signal for the bullish trend of the price to continue towards the next focus zone at the height of 1.20000.
