The US dollar showed significant strengthening yesterday following the market's reaction to the important data published, namely the United States (US) inflation.
The annual US inflation reading for January came in at 3.1%, down slightly from the previous month but missing the forecast of 2.9%.
After being assessed, the market sees that US inflation is still high and it is not yet the right time for the Federal Reserve (Fed) to start lowering interest rates in the near term, at least not in March.
Thus, the US dollar has strengthened to a 3-month high and plunged the Euro currency to a recent 13-week low.
This can be observed on the chart of the EUR/USD currency pair yesterday with a daily price plunge of almost 100 pips taking place.
At first the price increase was seen heading towards the 1.08000 level to test the SBR (support become resistance) zone.
But before the price had time to touch it, the price made a dive in the New York session when the inflation data was published.
The significant strengthening of the US dollar has pressured the price to fall to reach the concentration level of 1.07000 at the same time recording the latest low level.
The price moving below the Moving Average 50 (MA50) barrier on the 1-hour time frame is expected to maintain the bearish movement to further lower levels today.
Price movements in the Asian session were flat above 1.07000 with expectations that the price decline will continue to break new record lows.
The target is to break through to the next concentration level at 1.06000.
Meanwhile, if the situation changes and sees the price jump up again, the SBR 1.08000 zone will again be the target to be tested.
If it succeeds in crossing the barrier, it will be a bullish signal for the price to continue its higher rise towards the 1.09000 zone.
