The US dollar will trade strongly after Federal Reserve (Fed) Chairman Jerome Powell gave a hawkish statement regarding monetary policy.
According to Powell, the central bank needs to keep interest rates high for a longer period to fight inflation.
Therefore, this will have an increasing effect on the US dollar as the Fed is expected to postpone interest rate cuts for the near term.
With the geopolitical tension factor that is getting hotter now will also provide additional support to the US dollar as a safe-haven currency.
Judging by the price movement on the chart of the EUR/USD currency pair, the price was more flat at the beginning of this week, temporarily slowing down the momentum of the price plunge that occurred last week.
On Tuesday yesterday, the price hovered above the 1.06000 support level after several price bounces occurred while approaching it.
However, the price is still seen to be moving in a bearish trend with the increase blocked by the Moving Average 50 (MA50) line on the 1-hour time frame of the movement on the EUR/USD chart.
Expecting further declines to continue, the 1.06000 level is likely to be attempted by the price before making another new low for the year.
The next price drop target will move to around 1.05000 anyway.
Meanwhile, if there is a rebound in prices after this, the initial rise in prices is seen to test the nearest resistance level at 1.07000.
A break below this level will signal a bullish trend change before a higher move is expected to occur.
