The sharp decline in the US dollar last week has recorded the biggest weekly drop since November last year as the latest published data further supports dovish statements by the central bank.
Following the United States (US) consumer and producer inflation readings published last week recorded a decline, the market agreed with the view of Federal Reserve (Fed) policymakers that the cycle of policy tightening phases is nearing its end.
However, investors are preparing for an interest rate hike that is expected to be implemented at next week's FOMC meeting.
The Euro currency has managed to take advantage of this situation by recording an increase in value to the highest level against the US dollar since February 2022.
If observed on the price chart of the EUR/USD pair, the price increase exhibited last week has passed the 1.12000 level and reached around 1.12400 for the current record high.
The price movement was flat on Friday compared to the surge in the previous days, but the price remained hovering above the Moving Average 50 (MA50) support level on the 1-hour time frame on the EUR/USD chart for a still bullish signal.
If the US dollar remains weak in trading this week, the price will continue its upward trend to higher levels towards 1.13000 and then 1.14000.
Investors are however also wary of the Euro's movement, ahead of the European central bank's policy meeting next week.
A price drop can occur if the price moves back below the 1.12000 level again.
Breaking through the MA50 support will trigger early expectations of a trend change and the price could head towards the 1.107000 zone before re-hitting the previous focus level of 1.10000.
