Expectations for investors to see the US dollar maintain its strengthening failed when the king of the currency only continued to strengthen at the opening of the Asian session only, but began to weaken again in the European session to the New York session.
Analysts expect two factors to drive the situation, the first is the profit taking activity against the US dollar at the end of August, but the US dollar is expected to strengthen again for a period of several weeks before the FOMC meeting in September.
Second is investor caution towards the US dollar ahead of the United States (US) NFP employment data report at the end of this week with expected employment growth figures to decline for August.
Meanwhile, the Euro currency was seen stealing the spotlight to strengthen in the European session yesterday after the hawkish indication by the representative of the European Central Bank (ECB) at the last Jackson Hole symposium with the expectation that interest rate increases will continue at the next meeting.
In addition, the President of the European Commission, Ursula von der Leyen, who is reported to be preparing an emergency intervention plan to deal with the protracted energy crisis in Europe, somewhat calmed the situation and supported the increase in the value of the Euro.
Therefore, the price on the chart of the EUR/USD currency pair that declined in the Asian session yesterday was close to last week's support level around 0.99000, started to rise in the European session and retested the parity level of 1.0000 until the end of the New York session.
Although slow price movement continues into the Asian session this Tuesday morning, the price above the Moving Average 50 (MA50) support level on the 1-hour time frame on the EUR/USD chart can give investors an early indication of a change in the price trend.
If the increase continues successfully, the resistance at the 1.01000 zone will be the focus for testing before a higher increase will also test the levels around 1.01600 and 1.02000.
On the other hand, if the price fails to stay above the 1.0000 zone, it is likely that the price decline will continue again past the 0.99000 support level.
A further drop in price will record the latest 20-year low with the target to reach the concentration level of 0.98000.
