Strong at the beginning of the week, the US dollar, the king of the currency, traded lower again on Tuesday yesterday as investors began to be cautious ahead of the release of inflation data from the United States (US) in the New York session tonight.
The latest consumer price index (CPI) reading is forecast to drop to 5.1% from 6.0% previously, which will fuel expectations for the Federal Reserve (Fed) to further slow monetary policy.
Therefore, the US dollar receives an early impact on expectations in that direction but the situation may change when the actual data is published.
If you look at the chart of the EUR/USD currency pair, the price that fell to the 1.08300 level at the beginning of the week bounced back up again yesterday to trade again above the 1.09000 level.
The zone has remained in focus since last week and the slow price movement in the zone resumed trading in the early Asian session this morning.
A price recovery signal for a more bullish movement is seen after yesterday's rise has crossed the Moving Average 50 (MA50) level on the 1-hour time frame on the EUR/USD chart.
For the expectation that if the US dollar remains weak, the price will continue to rise higher and potentially surpass the height reached last week.
Then, the price is expected to react at the 1.10000 level to test the resistance zone and also record the latest high level.
But on the other hand if the US dollar strengthens, the price can plunge again as shown at the beginning of the week before testing the support zone at 1.08000.
A drop lower with more clear bearish indicators would expect the price to go up to around 1.07000 which was the focus zone in the previous trade.
