The weak US dollar is increasingly opening up space for the Euro to recover from its 3-year low last week.
The US dollar's decline was driven by the release of the US (US) producer inflation report for December which rose more slowly than expected to remain the same as the previous month.
This provides a gloomy early indication for the release of the US consumer inflation report in the New York session tonight.
Examining the EUR/USD currency pair price chart, the price has recovered from the fall to the 1.02000 level tested at the beginning of the week.
The price increase has managed to reach the 1.03000 level which was the focus of trading last week before the NFP report was published.
The price movement which has now passed the Moving Average 50 (MA50) barrier line on the 1-hour time frame on the chart gives a bullish signal to investors.
The next indication for price direction will be determined by tonight's CPI figures with volatile movements expected to be on display.
A strong rally in price will target 1.04000 before last week's resistance level of 1.04300 is tested.
Conversely, if the price situation plunges, the price support zone at 1.02000 will come back into focus.
A deeper plunge through that zone will push prices to a fresh 3-year low with the target shifting to 1.01000.
