Disappointing analysts' expectations to see a more dramatic impact at the FOMC meeting early yesterday morning when the Chairman of the Federal Reserve (Fed), Jerome Powell did not give a very clear signal on the setting of further monetary policy.
The results of the meeting saw interest rates raised by 25 basis points in line with the market majority's forecast of 5.25%, prompting an initial decline in the US dollar.
A follow-up statement by Powell stated that there will be a major change in what the market sees as a signal to stop rate increases, but he also emphasized that the central bank is still determined to lower inflation to the target level.
This situation is seen to limit the further decline of the US dollar, instead starting to show a recovery in trading in the following sessions.
Meanwhile, the Euro plunged after the decision of the European Central Bank (ECB) policy meeting also saw an interest rate increase of 25 basis points, which is the lowest increase since July 2022.
However, the ECB also signaled that policy tightening is still needed to 'tame' high inflation.
Observing the price movement on the EUR/USD pair chart, the price increase is shown first following the FOMC meeting.
Continuing trading in the Asian session yesterday morning, the price continued to rise slightly above the 1.10800 level testing last week's resistance.
Then, the market witnessed a plunge in prices until the impact of the ECB meeting pressured the price down to the concentration level of 1.10000.
A slight weak rebound was exhibited until trading resumed in the Asian session this morning (Friday), but the price movement below the Moving Average 50 (MA50) barrier level on the 1-hour time frame has given a bearish indication.
If the price decline continues below the 1.10000 level, the price is expected to decline towards the next support zone at 1.09000.
After a clear signal of bearish movement for the price, a further decline could reach up to around 1.08000.
However if the price makes another surge at the end of this week, the 1.10800 zone is still an important resistance to break through.
If successful, the rise will continue to higher levels towards the target at 1.12000.
Investors will be more cautious awaiting the publication of the United States (US) NFP employment data report in the New York session shortly.
