A new possibility emerged in the market for the Federal Reserve (Fed) to slow down its aggressive policy tightening when the economic data of the United States (US) published from the beginning of this week was less encouraging.
Investors are now looking forward to the release of US economic growth data (GDP) for the third quarter which will also be the focus of the Fed, while the US dollar remains weak until yesterday's New York session.
The strong Euro currency this week will be watched by investors as the focus shifts to European central bank policy meetings at the start of the New York session tonight.
The European Central Bank (ECB) is expected to increase interest rates by 75 basis points to 2.00% from 1.25%.
The price movement on the chart of the EUR/USD currency pair still maintained a bearish trend until the end of yesterday's trading session in New York with the latest increase having reached the highest level in 6 weeks.
Expectations for the US dollar to remain weak will push the price up to pass the 1.01000 and 1.01600 zones.
If the price reaction in the New York session continues to support the higher bullish pattern, the price could potentially reach up to the 1.03000 highs.
However, analysts do not rule out the possibility of a change in direction that could occur heading into the end of this week's trading.
The decline will retest the 1.0000 parity zone before testing the 1-hour Moving Average 50 (MA50) support level on the EUR/USD chart to signal the start of a bearish trend.
The price drop will go back to the previous concentration levels such as at 0.99000 and 0.98000 before going to the support zone last week at 0.97000.
