The US dollar is seen to have started an early strengthening rhythm at the opening of trading this week in the New York session yesterday following comments by Federal Reserve (Fed) Chairman Jerome Powell on the economic outlook at the event of the annual economic conference.
Markets remain evaluating Powell’s positive speech after expectations for 6 more interest rate hikes on the balance of each meeting throughout the year.
Meanwhile, the escalation of the protracted Russia-Ukraine war crisis is seen to add to the burden on Europe with various sanctions being implemented.
The German government warns that the economy cannot function well without Russian oil imports.
Thus, the Euro currency is forecast to continue to experience a decline in the market this week in addition to pressure by the US dollar which may continue its strengthening.
On the price chart of the EUR/USD pair, a slow movement was displayed in Monday's trading but gave a bearish signal after the bulls failed to break the Moving Average 50 (MA50) barrier level in the 1 -hour time frame.
After a slight decline in the New York session, the price resumed trading in the Asian session this morning (Tuesday) with a decline beyond the support level of 1.1000.
This is an early indication for lower declining prices supported by factors that strengthen the US dollar and pressure by the Euro.
The lower decline will first test the level around 1.09000 before continuing the decline towards the support zone at around 1.08000.
However, if the price manages to make a rebound and passes the MA50 barrier, investors will evaluate it as an early signal for a change in the bullish trend.
Rising prices will test the highs reached last week at the SBR (support become resistance) zone of 1.11300.
Next, the price will test the focus level at 1.12000 on a successful rise.
