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April 24, 2021

EUR/USD Plunges After ECB Meeting Decision

 The US was seen strengthening in New York session trading yesterday with market risk-off sentiment. The Wall Street market exhibited a decline and renewed investor concerns.

Investors will also be more cautious to trade the US dollar ahead of the US central bank’s (FOMC) policy meeting next week.

Meanwhile, the Euro currency is expected to provide interesting action following the decision of the European central bank (ECB) policy meeting yesterday.

The ECB maintained interest rates and is still pursuing its government bond -buying program at a brisk pace and there are no discussions to reduce it.

ECB President Christine Lagarde is aware of the economic signs of recovery, but the short -term outlook remains bleak. The firm's activities are expected to recover after this.

Reacting to the outcome of the ECB meeting, the Euro currency plunged back after moving positively initially at the start of the European session.

On the price chart of the EUR/USD pair, the price initially made a rise above the level of 1.20600 testing once again the resistance zone this week.

Then the price has plunged around 70 pips falling back below the Moving Average resistance level of 50 (MA50) on the 1 hour time frame of the price movement signaling for the beginning of the bearish trend.

The decline, however, was supported by the 1.20000 level in the RBS (resistance become support) zone like the decline displayed on Wednesday.

After hitting the 1.20000 level, the price moved slowly until trading resumed the Asian session on Friday.

The MA50 barrier will be tested and is expected for the price to resume today’s decline below the RBS 1.2000 zone towards the next focus zone at 1.19500.

If a bullish is displayed, the resistance zone at 1.20600-1.20900 will continue to be tested before the price continues to rise higher up to the level of 1.21500.