The US dollar has experienced a significant decline after the minutes of the FOMC meeting were published early this morning, following the reading of the United States (US) manufacturing and services PMI data which was previously published gloomy in the New York session.
Markets were surprised when details of the scrutinized minutes showed a majority of central bank policymakers agreed on the need to slow down previously aggressive interest rate hikes.
This shows that even before the employment and inflation data were published, policymakers were looking at steps to slow down the aggressive tightening in order to offset the risks of a recession on the US economy.
Thus, the US dollar has resumed its decline in the previous weeks even though the market sentiment is still considered risky with the development of Covid-19 remaining under the market's watch.
The price chart of the EUR/USD currency pair shows a bullish pattern again with a daily increase recorded on Wednesday of around 100 pips.
The price made an increase from the support level of 1.03000 and reached the target level of 1.04000 at the end of the New York session.
Continuing trading in the Asian session this morning (Thursday), the increase still continues with the signal remaining bullish for the price which is above the support level of the Moving Average 50 (MA50) on the 1-hour time frame on the EUR/USD chart since Tuesday.
The target for further price increases is to test the height reached last week at around 1.04800 and the 1.05000 zone is the price focus.
Successfully breaking the resistance will record the latest 5-month high with the next target at 1.06000.
However, the market uncertainty at the end of the week and the still risky market sentiment could change the price to fall again.
A price drop below 1.04000 again is likely to return to the 1.03000 support before investors assess the signal of a change in the price trend.
A further drop is expected to reach the 1.01000 zone if the US dollar dominates the market again.
