The US dollar traded strongly at the opening of the market earlier this week driven by factors influencing the past week in addition to risk-on market sentiment.
The upheaval in China as the world's second largest economy invites concern for the global market while also giving an advantage to the US dollar as a safe-haven currency.
The US dollar is also seen to be maintaining its strengthening momentum last week after the United States (US) inflation data was published again increasing again for the first time since June 2022.
Of course, other major currencies are affected by the current situation, especially the anti-dollar currency, the Euro.
On the chart of the EUR/USD currency pair, the price has shown a decline to a new 6-week low after surpassing the level reached in early August.
Following the strengthening of the US dollar, the price was pushed low at the beginning of the New York session to reach 1.08750 but bounced back before closing the trade at the end of the session around 1.09000 which is an important zone for the price.
The price hovered slowly in the 1.09000 zone at the beginning of the Asian session this morning (Tuesday), but the price movement that is still below the barrier level of the Moving Average 50 (MA50) on the 1-hour time frame on the EUR/USD chart remains a bearish signal.
Based on yesterday's pattern, the price drop is expected to continue further with the target to reach the 1.08000 concentration zone.
The lower target is at 1.07000 if the price continues to decline to maintain the bearish trend, as well as record a recent 10-week low.
However, if the price shows a surge again, the level of 1.10000 is seen to be tested which becomes an obstacle when making the price.
If successful, the price will head to the concentration zone of several weeks ago around 1.10400 after indicating a bullish trend change.
