The US dollar maintained its strengthening momentum to dominate financial markets earlier this week after investors still digested the highest inflation surge since 1981 in the United States (US) on data release last Friday.
In addition to soaring US bond yields, the strengthening of the US dollar is now driven by expectations of a significant rise of up to 75 basis points in interest rates by the Federal Reserve (Fed) ahead of this week's FOMC meeting.
As an anti-USD currency, the Euro failed to withstand the violent pressure by the US dollar until it slipped to a 1-month low.
The German economic sentiment report of the ZEW survey in today’s European session will draw the attention of investors who are likely to influence the movement of the Euro.
Examining the price movement on the chart of the EUR/USD currency pair, the bearish pattern continued at the market opening earlier this week continuing the decline at the end of last week.
The price is seen declining below the 1.05000 zone then has dropped to reach the latest support zone at 1.04000.
The price movement remains bearish with the price signal moving below the Moving Average 50 (MA50) barrier on the 1 hour time frame on the EUR/USD chart.
This support zone at 1.04000 has actually been a price support in the last trade of 2016 before successfully boosting the price again.
If the price falls below that zone, the latest downside target is seen to reach up to 1.03000, recording the lowest level since 2002, the lowest in 20 years!
However, on the other hand if the price manages to make a rebound, the initial resistance that will be tested is around the 1.05000 zone again.
And a higher rise beyond that zone will bring an indication for the possibility of a trend change to occur.
