The average daily movement on the price chart for the EUR / USD pair which is relatively large compared to the usual earlier this week has made investors more cautious in controlling trading risk.
The drastic movement of prices was seen to be driven by the strengthening US dollar which reacted as market focus focused on the emergence of new variations of Coronavirus that raised concerns around the world.
As posted on Monday, Tuesday’s price movement in the New York session also featured price falls due to similar factors.
Concerns have risen over positive sentiment over the $ 900 billion Covid-19 aid package in the United States (US) which has been approved along with a $ 1.4 trillion stimulus package to fund the government for a year.
The aid package needs to be signed by President Donald Trump. However, he stated that the total assistance of $ 600 to the people is very low and should be increased to $ 2,000 or $ 4,000.
Prices on the EUR / USD chart were seen plummeting again in the New York session yesterday after a rise in the previous session tested the resistance level of 1.22500.
From that height, the price plunged 100 pips to the level of 1.21500 before slowing in the RBS zone (resistance become support).
The Asian session on Wednesday saw prices still hovering in the RBS zone, but price movements below the Moving Average 50 (MA50) barrier level within the 1-hour time frame signaled a lower decline.
If the decline continues above the level of 1.21500, the price is seen to fall lower towards the support zone below the level of 1.20900.
On the other hand if the price jumps again and manages to overcome the dynamic barrier of MA50, the resistance level at 1.22500 will be tested again.
The high level of 1.23000 will be the price target if the bullish momentum is maintained.
