Price movements on most charts of major currency pairs are seen to be still flat and have yet to show a significant reaction, but why could EUR/USD soar to 150 pips yesterday?
Among the factors seen driving the price spike on the main chart was a follow -up to positive market sentiment influenced by the development of peace talks between Russia and Ukraine.
In negotiations in Istanbul, Russia agreed to withdraw its troops from Kyiv, with a proposal of neutral status by Ukraine, and not to join NATO.
In addition to the factors of sentiment change that anticipate the start for the US dollar to move weaker, investors are also examining the factors driving the strengthening of the Euro.
Discussions among members of the European central bank (ECB) have boosted investor confidence in the Euro after there were indications for an interest rate hike of up to 60 basis points by the end of the year.
Following that, investors have seen a price surge on the EUR/USD chart yesterday starting in the European session after the price moved past the 1.1000 barrier.
Giving a bullish signal, the price has jumped from the support level of Moving Average 50 (MA50) on the 1 -hour time frame and reached the high level of 1.11300 retesting the zone which was the previous resistance.
After recording around 150 pips daily gains, the momentum of the price spike failed to be maintained in the New York session when the price was seen retreating slightly from the height zone reached and moving slowly until the end of the session.
With the pattern displayed, the price is likely to extend its rise past the SBR (support become resistance) zone of 1.11300 before heading to the focus level of 1.1200.
Nevertheless, investors should be cautious if the US dollar starts to show a strengthening again with the focus on the New York session to be focused on the private sector jobs report in the United States (US) for clues ahead of the NFP report over the weekend.
If the US dollar strengthens and pressures the price to make another decline, the 1.1000 level will return to the focus and will likely be the latest support.
On the other hand, if the price continues to plunge lower and signals a bearish movement, the price decline is seen to head back to the level around 1.0900 before testing the support zone at 1.0800.
