Investors began to be cautious heading into the end of the week when the movement patterns of major currencies began to show a change in direction.
The US dollar returned to showing recovery at the beginning of the New York session yesterday after moving weakly from the beginning of the week following the influence of the economic data of the United States (US) which showed good readings for the service sector in August.
However, the strengthening momentum started to fade as trading moved towards the end of the session.
Markets are cautiously awaiting the start of the Jackson Hole symposium tonight with the main focus being on the opening remarks by Federal Reserve (Fed) Chairman Jerome Powell.
On the chart of the EUR/USD currency pair, the previous bullish price pattern started to falter as yesterday's decline was affected by the published manufacturing and services PMI data.
Dreary PMI data for Germany put pressure on the Euro while the US dollar managed to firm up as the data was published in the New York session.
The price has dropped back to the target level of 1.11000 but did not extend the decline lower when it showed a rebound to resume trading in the Asian session this morning (Friday).
But early signs of a change in the bearish trend made investors cautious, with the price already starting to move below the barrier line of the Moving Average 50 (MA50) on the 1-hour time frame on the EUR/USD chart.
If the decline continues to break through support at 1.11000, the price is at risk of reaching around 1.10000 again.
However, if the price manages to jump stronger after this re-crossing the MA50 barrier, the price still has the potential to resume the previous bullish movement and overcome the height of 1.11700 that has been reached.
The next target is to go to the 1.12000 zone if the upward trend continues again.
