Positive investor expectations following hawkish indications by the European central bank last week continued to support the strong performance of the Euro currency at the beginning of the market opening this week.
The European Central Bank (ECB) signaled an aggressive interest rate hike and revealed plans for quantitative easing, both measures aimed at tightening monetary policy.
This situation will have an impact on the increase in the value of the Euro currency in addition to taking advantage of the depreciation of the US dollar.
Investors are cautiously awaiting United States (US) inflation data to be published in the New York session tonight, prompting the US dollar to trade weakly at a 2-week low.
Therefore, investors witnessed the pattern of rising prices displayed on the chart of the EUR/USD currency pair from last week continuing at the beginning of this week.
On Monday trading yesterday, the price made an increase from the level of 1.00600 passing the resistance of 1.01000 until it almost touched the high level of 1.02000 with a daily increase of around 140 pips and recorded the latest high level of 4 weeks.
However, failing to pass the 1.02000 level, the price dropped again by almost 100 pips to the 1.01000 level which is now a support level for the price.
The price is still showing movement in a bullish trend that is above the support level of the Moving Average 50 (MA50) on the 1-hour time frame on the EUR/USD chart.
So, the decrease displayed in the New York session yesterday can be evaluated as a price correction (correction) for the price to continue rising higher today.
If the increase continues, the high level reached yesterday will be overcome for the price to record the latest high level again this week.
The target for the continued rise is at 1.02400 before reaching the highs of 1.03000.
However, if the price breaks below the 1.01000 level and crosses the MA50 support level, investors should be on the lookout for another bearish signal.
Attention will be paid again to the parity level of 1.0000 or the level of 0.99500 which was the focus of last week for the decline to continue this week.
