The US dollar's movement yesterday was influenced by the reaction to the United States (US) inflation data published in the New York session.
Consumer inflation in December 2024 rose to 2.9% from 2.7% as expected, strengthening expectations for a slowdown in monetary policy easing by the Federal Reserve (Fed).
The US dollar weakened briefly at the beginning of the New York session before strengthening again towards the end of the session.
It can be seen on the EUR/USD currency pair chart yesterday, the price jumped at the beginning of the New York session to a high of 1.03500 after leveling off in the 1.03000 zone from previous sessions.
However, the strengthening of the US dollar has pushed the price down again until it sinks below 1.03000.
The daily low reached around 1.02600 before then rebounding slowly and leveling off below the 1.03000 zone until trading continued into the opening of the Asian session this morning (Thursday).
Investors are still watching for a clearer bearish signal when the price is still seen climbing above the Moving Average 50 (MA50) support line on the 1-hour time frame on the EUR/USD chart, which shows that the price is still holding out from falling lower.
If the price starts to fall below the MA50 line alongside further strengthening of the US dollar, the price is seen to plunge to the 1.02000 support zone that was tested earlier in the week.
A break lower would push the price to record a fresh 3-year low with the target shifting to 1.01000.
However, if a rebound is shown above 1.03000, the price is likely to be able to surge higher to surpass yesterday's level.
Next, the 1.04000 level will be the focus on expectations of continued higher price action.
