The US dollar experienced a significant drop at the opening of trading earlier this week, especially in the New York session yesterday as attention was focused on Donald Trump's inauguration as the new President of the United States (US).
The implementation of tariffs is likely to be temporarily halted, causing the US dollar to weaken towards the end of the session.
However, the king of currencies appeared to strengthen again in Asian trading this morning (Tuesday) following Trump's announcement that tariffs on Mexico and Canada would begin on February 1.
While signing executive orders, Trump answered questions posed to him on various issues.
Judging by the EUR/USD price chart, the price, which had been slowly hovering in the 1.03000 zone, has finally surged to break through the target level at 1.04000.
The price increase once again tested the resistance level of 1.04300 as in early January, but the same situation occurred where the price was held back to continue rising higher.
In the Asian session, the price showed a decline below 1.04000 back to around 1.03500.
The price bounced back slowly to approach the 1.04000 level again with investors assessing the indications for the further direction of the price.
With the momentum of yesterday's surge, the price has the potential to continue its rise above the 1.04300 resistance before recording a new high.
The target for a higher increase is towards the 1.05000 zone.
However, if the price fails to hold above 1.04000, the price could be pressured to fall again, expected to return to the 1.03000 focus zone.
A lower below that zone would give a bearish signal to investors with the next decline the price could reach the previous support of 1.02000.
