European inflation data published yesterday with rising figures is expected to support the strengthening for the Euro currency.
This is because rising inflation will push the central bank to tighten monetary policy, thus further strengthening expectations for an interest rate hike implemented by the European Central Bank (ECB) after several indicators were presented earlier.
However, why did the price on the EUR/USD chart fail to make a rise yesterday? Even prices on the other hand display a bearish pattern.
The situation was driven by the re -strengthening of the US dollar with changes in market sentiment returning to risk with investor concerns directed at rising global inflation.
Moreover, hawkish comments by one of the Federal Reserve (Fed) Governors also injected the strength of the US dollar stating the central bank should be prepared for a 50 basis point increase in interest rates for every policy meeting from now on.
As a result, the price on the EUR/USD chart has displayed a daily decline of around 90 pips back testing the current support level at 1.07000.
After the price failed to pass the resistance zone at 1.08000, the decline below the resistance level of Moving Average 50 (MA50) on the 1 -hour time frame of the price movement has triggered a signal for the beginning of a bearish trend.
If the price moves lower today below the 1.07000 zone, the price movement on the more obvious bearish trend is seen to lead to the RBS (resistance become support) zone at 1.06000.
On the other hand if the price manages to maintain the momentum for the previous bullish movement, the price will bounce back from the 1.07000 zone by testing the resistance zone at 1.08000.
Higher rises beyond the zone will record the latest 5 -week highs and will expect price increases to continue further.
