The movement of the US dollar this week will be driven by the sentiments of Federal Reserve (Fed) Chairman Jerome Powell's speech at the close of trading last week.
The market viewed Powell's cautious speech as dovish and likely to add more pressure to the US dollar heading into the December FOMC meeting.
Awaiting new indications, there were no surprises delivered by Powell where the majority of the market remains seeing no interest rate hikes to be implemented while rate cuts are expected to start in mid-2024, or as early as March.
But in the past week, the US dollar has managed to show a slight recovery starting after the third quarter economic growth data was published on Wednesday.
The euro was among the currencies that returned to receive a renewed push as it recorded a depreciation after previously reaching a recent 3-month high.
If observed on the chart of the EUR/USD currency pair, the price initially reached the 1.10000 level which then became a resistance for the price.
The price retreated back down until the end of last week reaching around 1.08300 before rebounding to close the last trading session at 1.0800.
Analysts who expect a tendency for further depreciation of the US dollar will make investors ready for a price hike again, but the price movement on the EUR/USD chart which is below the Moving Average 50 (MA50) barrier on the 1-hour time frame still maintains a bearish signal.
If the decline continues, the price is likely to head towards the concentration zone at 1.08000 above last week's level.
If the penetration is lower, this will be a bearish signal for the price and there is a risk of further downward movement.
On the other hand, if the price bounces back this week, breaking the MA50 barrier will push the price back towards the 1.10000 level to test that resistance.
Breaking through the highs reached last week will set a new high with a target to reach the next concentration level at 1.11000.
