Risky market sentiment has driven increased demand for the safe-haven currency towards the end of the week.
The US dollar along with the Yen and Swiss franc stood out in trading on Thursday amid panic selling in stock and crypto markets with speculation of massive policy tightening by major central banks.
The Federal Reserve (Fed) is seen to be a few steps ahead of other central banks after aggressively raising interest rates to 50 basis points at the last FOMC meeting, and is expected to do the same for the next few meetings.
Against the Euro, the US dollar has managed to strengthen to a 5 -year high while the European currency continues to struggle with a number of stressful factors.
But the situation could change if investors begin to absorb expectations for an indication of an interest rate hike to be initiated by the European Central Bank (ECB).
On the price chart of the EUR/USD pair, the price has displayed a more aggressive decline yesterday after successfully breaking the 1.0500 support zone.
The support zone has been supporting the price since the end of April, but failed to contain yesterday's lower price decline to record the latest 5 -year low.
The price has dropped to below the 1.04000 focus zone, which is the price support zone in December 2016 trading. The lowest decline hit around 1.03550 in the New York session.
And if the decline continues at the close of trading this week, the price is seen to record the latest price low for 20 years, that is since 2002.
If the price increases, the resistance is seen in the 1.0500 zone, which is the latest SBR (support become resistance) zone to be tested.
Exceeding that level will signal for a higher price increase towards the next resistance zone around 1.0600.
