The US dollar managed to show strengthening in the New York session yesterday, still riding the positive momentum on the United States (US) NFP employment data report published last Friday.
Although the majority of the market sees the need for the Federal Reserve (Fed) to ease some of the previous policy tightening, there are investors who expect the policy tightening measures can still continue.
This is due to the reading of the employment report in March showing a good reading, showing that the economy is still managing to absorb pressure. Thus, the central bank still has room to tighten policy to lower inflation to the target level.
For now, analysts see the US dollar moving better but still warn that at any moment the king of the currency will lose ground again.
Examining the main price chart of the EUR/USD currency pair at the beginning of this week, the price which was initially flat in the early sessions around the 1.09000 zone then plunged in the New York session around 80 pips.
A bearish signal was received with the price movement failing to cross the Moving Average 50 (MA50) barrier on the 1-hour time frame on the EUR/USD chart, seeing the price remain below it.
The decline has reached around 1.08300 before the price bounced back higher at the end of the New York session and continued the gains at the start of the Asian session this morning (Tuesday).
However, if the price movement remains below the MA50 barrier today, the price decline is expected to continue further.
Next, the price is seen to go to the support zone at 1.08000 and if it breaks lower, it can reach around 1.07000.
However, the situation will change when the US dollar moves weakly again in the market and sees a jump that will happen on the price chart.
A rise above the 1.09000 zone and the MA50 barrier will trigger a bullish signal for the price to move higher again.
The target to be reached is at the height of 1.1000 which is expected to be the latest resistance for the price as well as record the latest 10-week high.
