Market sentiment was assessed mixed in mid-week trading this week with the US dollar again showing a dismal performance since yesterday’s New York session.
The US treasury yield, which fell below the 3.00% level, prompted a decline in the current value of the US dollar.
Meanwhile, a resurgence in the stock market that erased previously recorded gains was a warning for investors to be wary of the risks that lie ahead.
Market focus will be on the outcome of the European central bank's policy meeting on Thursday which will determine the direction of movement of the Euro.
The European Central Bank (ECB) has previously given several signals to implement a possible interest rate hike at its July meeting. However, is the rate hike going to happen faster this month?
The Euro recorded gains against the US dollar in the New York session yesterday but price movements remained risky until the results of the meeting were announced.
On the price chart of the EUR/USD pair, the price that made yesterday’s decline has reached around 1.06550 before rebounding around 50 pips.
The bulls have tested the resistance level at 1.07000 while also testing the Moving Average 50 (MA50) barrier on the 1 -hour time frame on the price chart.
Prices that still fail to pass the barrier remain an indication for the price to continue the bearish trend movement.
For further price declines, the target is to head to the RBS (resistance become support) zone at 1.06000 after overcoming last week's lows.
If the RBS zone fails to re -support the upside, the price may decline lower towards the focus zone at 1.05000.
However, if the US dollar remains weak and pushes the price to make higher gains, early signals of a trend change will be evaluated by investors after the price passes the MA50 barrier and moves above the 1.07000 level.
The rally is set to head to the 1.08000 high to test the resistance zone after last week’s attempt failed to break it.
