The US dollar maintained a strengthening pattern until the last trading session last week showing a recovery after weakening when the Federal Reserve (Fed) implemented aggressive interest rate cuts last September.
In the wake of Iran launching an attack on Israel and increasing tensions in the Middle East, the US dollar as a safe-haven currency began to show a re-strengthening that gained advantage in a risky market environment.
In the New York session on Friday, the market looked at the United States (US) NFP employment report for September which came with a strong reading.
This has supported the US dollar to strengthen to a 7-week high against the Euro with this week's market focus on the US inflation report.
Examining the price movement on the chart of the EUR/USD currency pair last week, the price showed a retreat from the high level of 1.12000 until it penetrated the support zone of 1.1000 at the end of the week.
When the reaction to the NFP data was published, the price plunged around 70 pips to hit the 1.09500 level for a 7-week low.
The slow price movement continues the opening trade of the Asian session earlier this week around 1.09700 by maintaining a bearish price signal that is below the Moving Average 50 (MA50) barrier line on the 1-hour time frame of the chart.
The US dollar, which is expected to maintain its positive momentum, has increased the tendency for prices to continue falling lower for the first few sessions.
The expected decline is to head towards the concentration zone at 1.09000 before the target shifts to support 1.08000 for the latest record low.
As for expectations for price increases, the resistance at 1.10000 must be passed first as well as the MA50 barrier before signaling a change in trend again.
A successful further rise in price is likely to lead back to the previous concentration zone at 1.11000.
