Closing last week, the US dollar weakened in the final sessions, retreating from its 2-year high.
Previously, the US dollar had shown significant strength in reaction to the results of the last FOMC meeting of 2024 announced last week with a hawkish signal by the Federal Reserve (Fed) to slow monetary policy next year.
In the New York session last Friday, the PCE price index, which measures personal consumer spending in the United States (US), came in with a less than encouraging reading, but still looked good.
The US dollar's momentum slowed slightly at the end of the week but is expected to continue to gain advantage for further trading.
On the EUR/USD chart, the price has shown a rebound when the initial decline approached around 1.03400.
At the end of the week, the price managed to bounce back above the 1.04000 zone with a height of around 1.04400 reached at the end of the last session.
It also signaled a change in the bullish trend when the price increase returned to the Moving Average 50 (MA50) line on the 1-hour time frame on the EUR/USD chart.
If the increase continues at the beginning of this week, the price is seen to return to the previous 'magnetic' zone, which is at 1.05000 which became the focus before the last FOMC meeting.
A higher increase beyond the zone will further strengthen the indication for the bullish price movement to continue with the target shifting to the resistance zone of 1.06000.
On the other hand, if the price fails to fall again, the nearest level is at 1.04000 which is expected to be tested by the price.
A lower plunge down is likely to exceed last week's level before the price heads to the support zone of 1.03000 in addition to recording the latest 2-year low.
