The US dollar moved on a gloomy note at the opening of the market earlier this week after ending last week's trading on a strong note showing renewed strength.
However, investors are more cautious for this week's trade which is the opening for November with several events focusing on the FOMC meeting and the release of the US NFP employment data report.
Markets remain expecting the Federal Reserve (Fed) to continue raising interest rates by 75 basis points for the November meeting.
Expectations for the strengthening of the US dollar will put pressure back on other major currencies in the market, especially the Euro, which has shown positive performance in the past week.
The euro failed to maintain its previous strengthening momentum after gloomy statements by the central bank at last week's policy meeting even as interest rate hikes were raised.
If the price chart of the EUR/USD currency pair is examined, the price has given an indication of a change in price direction at the end of last week when the US dollar started to strengthen after the release of US economic growth data.
The price, which was close to a high at 1.01000, plunged back below the 1.0000 parity zone before hovering slowly around 0.99500 at the end of the week's session.
The flat price movement around 0.99500 started trading at the opening of the week, but the price moved below the Moving Average 50 (MA50) resistance level signaling the price's tendency to continue the decline lower.
If the downward pattern continues, the price is seen to head towards around 0.99000 testing the RBS (resistance become support) zone.
A further drop in price continuing the bearish trend movement will push the price to retrace to around 0.98000 or the support zone at 0.97000.
Meanwhile, if there is a rebound in price above the MA50 barrier and also the 1.0000 parity level, investors will evaluate it as a signal for prices to resume the bullish trend of the previous week.
The price increase will continue towards the 1.01000 resistance that failed to touch last week. A break above that level will set a new 7-week high.
