The US dollar was disabled in trading in the New York session yesterday after the market's reaction to the inflation data of the United States (US) which has been the main focus expected since the beginning of the week.
The annual US inflation reading was 8.5% for July, down from a 40-year record high of 9.1% in June.
This had the effect of weakening the US dollar as soon as the data was published, giving other major currencies room to rise again, and showing drastic price movements on the major charts yesterday.
As observed by the price movement on the chart of the EUR/USD currency pair, the price has recorded a daily increase of up to 160 pips in the New York session after the horizontal movement of the price has been displayed since the beginning of the week.
The significant surge in the price has also broken through the important resistance zone at 1.03000 while marking a recent 5-week high.
However, after reaching highs around 1.03600, the price eased back to close at the end of the New York session at 1.03000.
If the price resumes the surge that occurred yesterday, the next price increase is seen to reach the 1.04000 level to test the concentration zone.
A higher move will target 1.05000 for the latest price high for the 6-week trading period.
On the other hand, if the price fails to maintain the surge momentum, the initial drop in price is seen to return to the 1.02400 level which has the potential to become a price support level again.
However, if the price continues to make a lower decline, the target is for the price to drop to the 1.024000 level and end the movement projection for the bullish trend.
