Expectations for the US dollar to continue to weaken towards the end of this week were misplaced as the currency king began to 'wake up' from his reverie.
After showing a gloomy reaction at the end of the FOMC meeting, the US dollar managed to show a recovery in several recent sessions.
Investors digested the statement by Federal Reserve (Fed) Chairman Jerome Powell who was in no hurry to lower interest rates.
However, analysts remain cautious with the central bank's concerns over global market volatility influenced by President Donald Trump's administration policies that could threaten the United States (US) economy.
The strengthening of the US dollar was observed in the price movement on the EUR/USD currency pair chart yesterday.
After the price hovered in the 1.09000 zone, the increase did not continue, but the price retreated down with a daily decrease of almost 100 pips recorded.
The price made a decline almost touching the support level at 1.08000 but bounced back slightly to close the New York session trading around 1.08500.
The movement below the Moving Average 50 (MA50) resistance line on the 1-hour timeframe on the EUR/USD chart indicates that the price is preparing for a bearish trend.
The decline will continue lower if the price drops below the 1.08000 level which is likely to be tested again in the final sessions of this week.
The target will shift to 1.07000 after the bearish signal is more clearly displayed by the price.
On the other hand, if the price makes a rebound, the 1.09000 zone is important to watch as a signal of a change in the price trend.
Next, the increase will return to target 1.10000 for the latest 5-month high.
