After a rather dismal performance at the end of last week, the US dollar managed to strengthen at the opening trade earlier this week.
But the market remains cautious awaiting important data to be published in the New York session tonight, namely the United States (US) inflation report for January.
The data, which is an important indicator for the Federal Reserve (Fed) to set the direction of their monetary policy, is expected to have a major impact on the market, especially on the movement of the US dollar.
If examined on the price chart of the EUR/USD currency pair, the rising pattern of last week did not continue following the strengthening of the US dollar which again depressed the price yesterday.
It can be seen that the price tested the SBR (support become resistance) zone of 1.08000 but failed to break through it before the price dropped back to the level of 1.07550.
The continued price movement in the Asian session this Tuesday morning is seen moving below the Moving Average 50 (MA50) obstacle line on the 1-hour time frame on the EUR/USD chart as a bearish signal.
The decline lower is expected to continue to overcome some of the concentration levels of the past week such as 1.07400 and 1.07200.
Next, the main support zone at 1.07000 will be the target to be hit if the decline continues to record the latest 13-week low.
But if the price manages to bounce back past the MA50 barrier, the SBR 1.08000 zone will be tested again.
And if the price breaks through the zone, it will be a bullish signal for the price to continue rising higher towards the concentration zone at 1.09000.
