The US dollar was still trading erratically on Tuesday yesterday as the market was still cautiously awaiting the United States (US) inflation data to be published today (Wednesday).
In the New York session, the focus will be on the reading of US consumer price index (CPI) data which is expected to rise to 3.6%.
Inflation rates that are moving away from the central bank's 2% target are likely to push the Federal Reserve (Fed) to continue tightening monetary policy.
If that situation occurs, the US dollar will have the advantage of strengthening in the market, at least leading up to the FOMC meeting next week.
Currently, the Euro currency is still stealing the opportunity to strengthen a little after the German economic survey data published yesterday is better than the previous figures.
However, investors will be cautious for the Euro currency pending the outcome of the European central bank (ECB) meeting on Thursday.
The EUR/USD currency pair chart saw the price still hovering above the 1.07000 support zone since the end of last week until yesterday's trading.
As expected, the strengthening of the US dollar did not happen in the New York session yesterday with the absence of major economic data, which saw the price initially drop almost to 1.07000 and then rise again to 1.07600.
The price increase if continued will lead to the previous resistance level at 1.08000 before showing a bullish move.
However, if the price declines again, the 1.07000 support level will be tested and likely to be broken if the US dollar strengthens.
Further declines will continue towards the latest target at 1.06000 with price signals continuing the previous bearish trend.
