As expected, volatile price movements will continue to add to trading risk at the end of the year.
In yesterday's New York session, the US dollar returned to a dismal performance as it experienced a more significant decline compared to the horizontal movement since the beginning of the week.
It is possible that the profit-taking situation for previous trading positions has pushed the US dollar to depreciate with the expectation that the king of the currency will return to shine next year.
This was due to hawkish signals by the Federal Reserve (Fed) at the latest FOMC meeting confirming measures to speed up tapering and expectations of a faster interest rate hike next year.
On the chart the EUR/USD pair yesterday saw a rebound of almost 100 pips after hitting a weekly low of around 1.12750 and reaching the latest 4 -week high around 1.13680.
This may come as a surprise to investors when they see more aggressive price movements after showing horizontal movements since the beginning of the week.
And it’s not impossible for prices to plummet again on weekend trading.
With yesterday’s price spike, a bullish pattern can be expected for prices to continue rising to higher levels if the US dollar continues to weaken.
The resistance zone at 1.14000 will be the focus if the rise continues for the price to test the important barrier after the price has fallen below it over the past 6 weeks.
For a plummeting price situation, if it happens, the price will retest the level reached yesterday around 1.12750.
Next the previous focused support zone at 1.12500 will return to signal for further price movement.
