The US dollar continued to strengthen in the Asian session yesterday to open early in the week with positive momentum at the end of last week driven by the encouraging US NFP employment report.
However, the momentum failed to be maintained when the movement began to slow in the European session before the US dollar showed a depreciation in value towards the end of the New York session.
Despite this, market analysts maintain expectations for the US dollar to still move on a strengthening path.
Investors are likely to take precautions ahead of the latest US inflation report which is the main focus of the Federal Reserve (Fed) this week, in addition to affecting US dollar trading.
Examining the movement on the EUR/USD currency pair chart, the price has made a decline to test the 1.02000 zone with a daily low recorded around 1.01800.
After leveling off in the zone until continuing at the beginning of the New York session, the price then showed a rebound before closing around the 1.02400 level.
The price increase continued at the opening of the Asian session this morning (Tuesday) approaching a high of 1.02800 before retreating back to the opening level of the session.
The price movement around the Moving Average 50 (MA50) line on the 1-hour time frame on the EUR/USD chart is observed for further price direction.
If the price increase continues after this, the resistance is at the 1.03000 level to be tested where last week, the price hovered in that zone before the plunge occurred when the NFP report reaction was published.
Passing that level will give a bullish signal for the price to continue rising higher towards the target of 1.04000.
On the other hand, if the price plunges again when the US dollar strengthens again, the 1.02000 support zone will be tested again like yesterday.
Further declines are expected for the price to record a new low towards the 1.01000 focus zone.
