Expectations for the US dollar to continue strengthening at the opening of March were misplaced when the king of currencies declined significantly in trading yesterday Monday.
The Euro, on the other hand, strengthened significantly following Ukraine's hopes of reaching a peace agreement supported by European leaders.
However, investors should be wary of the risk of Euro movements ahead of the European Central Bank (ECB) policy meeting on Thursday, which is expected to continue cutting interest rates.
Meanwhile, analysts still see the potential for the US dollar to strengthen following the tariffs on Mexico and Canada implemented by President Donald Trump that will take effect today (March 4).
Examining the price movement on the EUR/USD currency pair chart, the price slowly hovered around 1.04000 after a 'gap' at the opening of the Asian session yesterday.
Then the price began to surge in the European session until it broke through the Moving Average 50 (MA50) barrier on the 1-hour time frame on the chart.
The price increase until the New York session reached the 1.05000 level again which was the resistance zone tested in last week's trading.
The price started to move slowly after testing the 1.05000 resistance and remained flat until the opening of the Asian session this morning (Tuesday).
If the momentum is still maintained, the price will rise above 1.05000 and then surpass last week's level.
A new high will be recorded with the target to go up to around 1.06000.
However, if the price declines after failing to pass the 1.05000 resistance, the price is likely to approach the support level at 1.04000 again.
For further declines, 1.03600 will be the next focus which is the lowest level reached last week before the target shifts to support 1.03000.
