The focus on Thursday’s trading yesterday was geared towards the outcome of the European central bank meeting which saw a shock on the movement of the Euro currency.
The European Central Bank (ECB) maintained interest rates for the meeting this time, but signaled for a 25 basis point increase in July, and 50 basis points at the upcoming September meeting.
However, after the results of the meeting, investors have seen a significant decline in Euro trading until the end of the New York session.
Analysts view expectations of 25 basis points for a rise at the July meeting to be lower than expectations for 50 basis points and invite early reactions for investors to let go of Euro holdings first.
However, for a longer period of time, the Euro is likely to rebound again after the hawkish tone delivered by the ECB.
On the price chart of the EUR/USD pair yesterday, the initial rise of the price took place from the level of 1.07000 reaching a high around 1.07700 before the decline took place.
Prices then plunged until the end of the New York session after the reaction to the results of the ECB meeting with a daily decline of around 160 pips recorded.
The declining price almost touched the 1.06000 level where it is expected that the upcoming price decline will test the RBS (resistance become support) zone.
If the RBS 1.06000 zone is successfully broken for the price to maintain yesterday's bearish pattern, the price is seen heading towards the 1.05000 level to close the weekend trading lower thus recording the latest 3 -week low.
On the other hand if the RBS 1.06000 zone manages to support the price to rebound, the initial rise will re -test the resistance at 1.07000.
The signal to resume higher gains will re -target the 1.08000 resistance zone after a few weeks the price has not yet managed to break through the zone.
The focus will be on the release of US inflation data in the New York session soon, which will affect price movements.
