A change in price direction was displayed at the opening of early December trading yesterday as the US dollar rebounded from last week's decline.
Investors were cautious at the start of the week after reports of Donald Trump's threat to impose tariffs of up to 100% on BRICS countries triggered risky market sentiment.
In addition to being driven by risk-off sentiment, the US dollar also received support from the release of ISM survey data published in the New York session yesterday, which saw a good reading for the US manufacturing sector in November.
Focus will turn to JOLTS employment data tonight before awaiting the US NFP employment report at the end of the week.
Examining the price movement on the EUR/USD currency pair chart, a signal of a price trend change was seen when the US dollar began to strengthen at the start of the week yesterday.
Opening yesterday's Asian session at around 1.05600, the price then showed a decline until it crossed the important level at 1.05000 before reaching 1.04600.
The price movement below the Moving Average 50 (MA50) barrier line on the 1-hour time frame on the chart was an indication of the bearish pattern with a daily decline of around 100 pips recorded.
However, towards the end of the New York session, the price rebounded slowly to return to near the 1.05000 support level before leveling off around that area early in the Asian session this morning (Tuesday).
The downward pattern is expected to continue for the price to next move towards the next support level at 1.04000.
A lower decline will again challenge the record low of this year near the 1.03000 zone.
However, if the price shows a significant rebound above 1.05000 and also crosses the MA50 barrier, this will be a signal for the price to move higher again.
Resistance is at 1.06000 for price to test before a new high is reached.
