EUR/USD Jumps 120 Pips Before Declining Around $1.0800


United States (US) inflation data published at the beginning of yesterday's New York session has triggered a significant depreciation of the US dollar currency.

The annual reading of the US consumer price index (CPI) for May fell to 3.3% compared to forecasts to remain at 3.4%.

Expectations that the Federal Reserve (Fed) is likely to switch to policy easing have pushed the US dollar to experience large losses at the beginning of the session.

But the situation changed after the FOMC meeting was focused on early this morning which saw the latest interest rate continue to be maintained at 5.50%.

Fed Chairman Jerome Powell was seen maintaining a hawkish tone in his follow-up speech when commenting on the interest rate-setting action.

After the meeting, the US dollar was seen to strengthen again to reduce the previous losses.

If observed on the chart of the EUR/USD currency pair, a daily increase of around 120 pips was successfully recorded yesterday with a strong surge in the New York session breaking through the expected level at 1.08000.

The price reached a height of 1.08500 as a reaction to the CPI data being published, but retreated back to the 1.08000 zone after the FOMC meeting took place.

Slow price movement resumed trading in the Asian session this morning (Thursday), flat above the 1.08000 zone.

If the surge still wants to continue, the price needs to pass the high level reached yesterday before continuing the rise to a higher level.

The target is to retest the 1.09000 resistance zone that was the focus of last week's trade.

On the other hand, if the price is pressed to fall below the 1.08000 zone, it is likely that the US dollar has returned to dominate the market and the price will be expected to drop lower.

An extended drop could reach the early week levels around 1.07200 or towards the support zone at 1.07000.