Surprising movements were displayed by the US dollar currency in the New York session yesterday, which was significantly reduced, failing to maintain the strengthening momentum of the previous sessions.
Investors are likely to be cautious ahead of the speech by Federal Reserve (Fed) Chairman Jerome Powell today (Thursday) and encourage profit-taking activities among investors.
Thus, the situation of the depreciation of the US dollar has given room for other major currencies in the market to rise again, including the Euro.
The euro escaped further damage as it managed to trade higher against the US dollar as investors expected the European currency to continue under pressure.
This is due to the protracted energy crisis in Europe with the extension of the closure of the Nord Stream 1 pipeline by Russia for maintenance works that are still not completed.
On the price chart of the EUR/USD currency pair, the price was seen to be at the support level of 0.98800 on Wednesday yesterday and the level successfully restrained the price from falling further.
The price has shown a daily jump of around 130 pips until it reaches back to the parity level of 1.0000 which is now an obstacle for the price hovering around that continues at the beginning of the Asian session this Thursday morning.
The price increase that also crossed the Moving Average 50 (MA50) level on the 1-hour time frame on the price chart has also triggered expectations of a change in the price trend again.
The price increase if it continues away from the parity level of 1.0000 will then be seen to test the resistance at 1.01000 in the SBR (support become resistance) zone.
However, investors should be prepared for a further drop in prices if the US dollar strengthens again while the Euro continues to trade at risk in the market.
The price that fails to move above the 1.0000 level is likely to decline again to retest the price support level at 0.98800.
And the decline that passes that level will record the latest 20-year low with a target of around 0.98000.
