Investors' expectations to see a higher move higher on the EUR/USD price chart yesterday were dashed as the situation began to change in the New York session.
At the beginning, the US dollar moved weakly in the Asian session connected to the European session influenced by market sentiment that recovered with positive developments in China.
Several focal locations in China are reported to have eased movement restrictions after the government was seen to comply with the people's insistence following massive protests that erupted.
However, in the New York session yesterday, the strong strengthening of the US dollar was supported by the release of survey data for the United States (US) service sector with encouraging readings.
Indications of the current good health of the US economy fueled renewed expectations for the Federal Reserve (Fed) to continue tightening their monetary policy.
The price on the EUR/USD chart has been seen plummeting to record a daily decline of around 110 pips after initially making a rise to a recent high of around 1.05900.
The price has dropped back to around the 1.05000 zone and crossed the Moving Average 50 (MA50) support level on the 1-hour time frame on the EUR/USD chart triggering a bearish trend change signal.
If the decline continues, the price is seen to head towards the 1.04000 level to test last week's concentration level.
Exceeding that level is likely to continue the decline towards the 1.03000 zone which was the previous price support zone.
However, it is not impossible that the price can change direction and make an increase again in the following sessions if the US dollar trades weak again.
For the expected price rebound from the 1.05000 zone, breaking the MA50 barrier will push the price back towards the resistance zone at 1.06000.
Next, the price that passes the zone and continues the bullish trend, will target around 1.07000 to record the latest 6-month high.
