The US dollar remained trading strong at a 3-month high on Wednesday yesterday, but the momentum of the surge started to slow down compared to the previous day.
Powell's testimony was still in focus yesterday for the second day of presentations where he still insisted that the central bank is committed to lowering the inflation rate to the target level.
Powell also stated that the decision for the March meeting has yet to be determined, but the market is seen to have locked in the expectation that a 50 basis point interest rate hike will be implemented.
The components of employment data are now focused by the market which will also be examined by the central bank in giving a clearer indication of the next monetary policy setting.
Examining the chart of the EUR/USD currency pair, the price movement was more horizontal on Wednesday yesterday a little 'rested' after a significant drop in the price had occurred the previous day.
Investors are likely to take a more wait-and-see attitude for the publication of the United States (US) NFP employment data report on Friday to assess the Federal Reserve's (Fed) monetary policy decision.
If parallel, the US dollar will continue to strengthen and pressure the price to fall even lower at the end of this week.
The bearish target is seen to test the 1.05000 support zone and is likely to continue the decline reaching 1.04000 for a 14-week low.
However, price increases can occur at the closing trades each week, so investors should be prepared for a counter movement.
In the event of an increase, one of the initial levels to pay attention to is at 1.06000 and the price will also test the Moving Average 50 (MA50) barrier on the EUR/USD chart's 1-hour timeframe.
Breaking that barrier will be an early signal for a trend change and the price will continue to rise towards the resistance zone at 1.07000.
