As we get closer to the focal event of the week, which is the United States (US) central bank policy meeting early Thursday morning, price movements are becoming more uncertain with changes in the value of the US dollar on Tuesday yesterday.
In the Asian session connected to Europe, the US dollar was traded weakly following the market sentiment which was slightly eased by the news of the relaxation of restrictions in China after the 'lockdown' reported earlier.
However, the US dollar strengthened again in the New York session yesterday following the release of good US economic data and supported the king of the currency.
A survey of the manufacturing sector in the US showed readings were at an expansionary level for October, while job opening data showed a higher-than-expected increase for September.
Evaluating the price movement on the EUR/USD currency pair chart, the price showed an increase in the Asian session yesterday from the support level at 0.98800 until touching the height at the 0.99500 level.
In focus, after the price tested the resistance level, the price plunged back below the 0.98800 level while continuing to trade until the end of the New York session.
Weak price gains were exhibited in continued trading in the Asian session this morning, but remained moving below the Moving Average 50 (MA50) barrier for a bearish signal.
If the pattern of price decline continues, the price is likely to drop to around 0.98000 with the expectation that there will be a reaction to attract the price around that area.
The next lower drop is seen to go to the price support zone at 0.97000 which has previously successfully rebounded the price.
Meanwhile, for expected price increases, jumping from the 0.98800 level and crossing the MA50 barrier will be an early signal for investors to expect a change in trend.
The upside will once again test the 0.99500 resistance before continuing the climb towards the 1.0000 parity level.
