As expected, the latest United States (US) inflation data published yesterday had a major impact on currency market movements.
The US annual inflation reading for October slowed to 3.2%, lower than the forecast of 3.3%, down from a reading of 3.7% in September.
This has strengthened expectations for the Federal Reserve (Fed) to slow down their policy and it is expected that interest rate hikes will not happen at the December meeting.
The US dollar weakened significantly in the New York session giving a lot of space to other major currencies in the market to strengthen, especially the Euro.
As observed on the chart of the EUR/USD currency pair yesterday, a daily increase of almost 200 pips was successfully recorded.
After moving flat at the 1.07000 level since yesterday's Asian session, prices have surged strongly in the New York session as the reaction to inflation data is published.
The price's energetic surge breached the 1.08000 focus level before hitting a high of 1.08800 at the end of the New York session, marking a fresh 11-week high.
With this momentum, the price is expected to continue its upward trend to reach even higher levels until the end of the week.
The target is to reach the resistance level at 1.08000 after the last time the price traded around that was last August.
But investors will remain alert for a decline if it occurs even if the price tendency is to continue to make gains.
If there is a decline, the price is seen to test the level of 1.08000 or around 1.07500 which was the resistance level in last week's trading.
A continued decline could re-reach the 1.07000 zone to display an important reaction to signal further price movement.
