Several factors hovering in the market yesterday have influenced the movement of the US dollar currency in different sessions.
At first the US dollar showed strengthening with the support of hawkish statements by Federal Reserve (Fed) Governor Michele Bowman on the central bank's monetary policy in addition to market risk-off sentiment with an assessment of China's economic data.
However, at the New York session, the king of the currency witnessed a further decline when a dovish statement was delivered by Philadelphia Fed President Patrick Harker who saw policy tightening as over.
In addition to the view that interest rates will be maintained, Harker also signaled that interest rate cuts will be implemented next year.
Meanwhile, developments in Europe are quite tense with the news that the Italian government is about to impose taxes on banks, leading to a severe fall in the stock market.
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The price movement on the chart of the EUR/USD currency pair saw the price plummet after testing the 1.10000 level which again became a resistance for the price.
The bearish signal of the price moving below the Moving Average 50 (MA50) barrier level on the 1-hour time frame has reached 1.09300.
Then the price rebounded a little towards the end of the New York session to close around the 1.09500 level.
The price showed a slow increase as it resumed trading in the Asian session today (Wednesday), but was still below the MA50 barrier.
If the price decline continues, the price will test the important zone at 1.09000 which is still a support for the price.
A breakout lower expects the price to head towards the next concentration level at 1.08000.
On the other hand, if the US dollar weakens significantly, the price will jump up, crossing the 1.1000 level and the MA50 barrier will signal a change in the direction of further price movement.
The rise will retest the height reached on last Friday's surge around 1.104000 before targeting a higher rise towards 1.11400.
