The Euro currency showed its best performance in trading last week when it managed to jump to a 5-week high against the US dollar.
This was driven by the actions of the European Central Bank (ECB) which raised interest rates by 25 basis points to 4.00% at the latest meeting last week.
Strengthening the Euro, ECB President Christine Lagarde signaled for several more interest rate hikes to be implemented by the central bank in an effort to lower inflation towards target levels.
The US dollar experienced a gloomy week with continued declines over the past week with the release of mixed economic data from the United States (US).
The Federal Reserve (Fed) has stopped raising interest rates at the latest meeting, but it is a reminder to investors that the situation will change after this following the Fed's hawkish statement to raise interest rates towards the end of 2023.
Examining the price chart of the EUR/USD currency pair, the price has reached a height of 1.09700 last Friday after the surge started from the 1.08000 zone the previous day.
The bullish price trend is still maintained with the upward movement continuing to be above the support level of the Moving Average 50 (MA50) on the 1-hour time frame on the chart.
If the increase continues successfully at the beginning of this week, the 1.10000 level is seen to be the main focus to be tested in price.
If it breaks through, the price will continue to rise to a high level around 1.10700 as well as record the latest 6-week high.
However, if the price has started to reverse its direction and make a dive below the MA50 support level, this will be an early sign of a change in trend and investors are ready for a strengthening of the US dollar.
If the price is pressed lower, it is seen that it will go to the 1.08000 zone which will be a temporary support for the price and the reaction in the zone will be evaluated.
A further drop that continues will test the 1.07000 level which is at a lower level.
