The US dollar has erased gains made over the past week as the market's reaction to Friday's US NFP jobs report saw a significant depreciation of the currency king.
Examining the report, the increase in employment in July was lower than forecast, in addition to the reading of the previous month's figure which was also updated to decrease.
However, the average income as well as the unemployment rate recorded good readings.
The US dollar has significantly weakened as soon as the report was published, and analysts see the situation mixed with profit taking by investors at the end of the week.
On the price chart of the EUR/USD currency pair last Friday, prices that were seen moving horizontally in the Asian and European sessions began to jump aggressively at the beginning of the New York session.
After the report was published, the price jumped 100 pips from the 1.09400 level to 1.10400 before retreating slightly to end the last session trading around 1.10000.
Remaining in focus until this week, the price was flat at the 1.10000 level in the Asian session for the opening of trading in the second week of August.
The surge in price above the support level of the Moving Average 50 (MA50) on the 1-hour time frame on the EUR/USD chart has given an early indication of a possible price trend that is about to change.
If the rising pattern continues this week, the price that surged from the 1.10000 level will surpass the highs of last Friday before continuing the rise to the highs reached before which is around 1.11400.
Next, the resistance zone at 1.12000 will be the next target if the price increase continues.
However, if the price starts to reverse and make a decline again, the bearish movement pattern like the previous weeks is likely to continue again.
A price that breaks through the MA50 support and then breaks through the 1.09000 zone will be a signal for a further decline to occur.
The next target is for the price to reach around 1.08000 which has the potential to be the latest support for the price.
