The decline of the US dollar continued into the middle of the week while the focus was on the Congressional election event in the United States (US) which started yesterday. The results are expected to be known within a few days.
With the decline in the NFP employment report last week, analysts also see market players taking advantage of profit-taking at this time with the expectation that the US dollar still has the potential to rise again for a longer trading period ahead.
However, US policy makers who see the need to slow down the previously aggressive interest rate hikes add to the wound for the US dollar. Focus will shift to the release of US inflation data on Thursday.
The euro maintained its strengthening pace from the beginning of the week which was also supported by the rise in German bond yields.
However, analysts warned for the Euro to experience a decline again as concerns about the energy crisis in Europe are increasing again.
On the price chart of the EUR/USD currency pair, prices are seen to maintain bullish trend movements since the surge that occurred last Friday due to the reaction to the NFP employment report.
The price increase in the New York session yesterday has returned to reach the high level reached in the last week of October, which is almost around 1.01000.
The move higher is expected to continue to break the 1.01000-1.01600 resistance to record the latest 8-week high.
A further move higher is expected to reach as high as 1.03000 if the US dollar continues to weaken.
On the other hand, the price could change direction again if the resistance at 1.01000 again fails to be broken.
The decline will again test the 1.0000 parity zone and if it fails to hold the price from falling lower, the decline will continue towards around 0.99000.
After the trend change signal, the price is expected to decrease until it returns to around 0.98000 or to the 0.97000 support zone.
