As expected by market analysts, the US dollar showed a strengthening on Wednesday's trading yesterday after the market began to digest the inflation data of the United States (US) which had an impact on the setting of monetary policy by the Federal Reserve (Fed).
Based on the reading of data that shows a slow decline in inflation, the Fed is seen to be unable to continue the pace of slowing policy tightening.
On the other hand, the Fed is seen to maintain a rate hike of 25 basis points for several more meetings.
In yesterday's New York session, US retail sales data was published with encouraging readings, adding further support for the US dollar's current performance.
The US dollar has traded strongly for several recent sessions, undercutting other major currencies.
The Euro also suffered a decline, failing to be supported by slightly hawkish central bank cues with a signal of a 50 basis point interest rate hike by the European Central Bank (ECB) at its March meeting.
The price chart of the EUR/USD currency pair showed a bearish pattern on Wednesday after the previous day's surge reached the 1.08000 level in reaction to the release of US inflation data.
The drop to the New York session yesterday reached the level of 1.06600 where it once again became a support as at the beginning of last week.
Price movement below the Moving Average 50 (MA50) barrier level in the 1-hour time frame of the EUR/USD chart in addition to the strengthening of the US dollar suggests a bearish price movement will be displayed.
Further decline is seen to be towards the 1.06000 level before passing to a lower level around 1.05000.
However, if the price bounces back above the 1.07000 level and crosses the MA50 barrier, this indicates that the US dollar may have lost momentum and the opportunity for the Euro to shine brighter.
The price increase will be expected to return to the resistance level of 1.08000 for the price to test the SBR (support become resistance) zone.
For US dollar trading in the New York session tonight, the producer price index (PPI) data will be the focus of investors.
