As if given false hope, investors were disappointed to see prices fall again on the EUR/USD currency pair chart at the end of the week after initially signaling for a bullish move.
This happened following the impact of the market's reaction to the speech by Federal Reserve (Fed) Chairman Jerome Powell at the Jackson Hole symposium, which stated that the central bank will continue to aggressively increase interest rates to lower the inflation rate in the United States (US).
Like a compass for investors, the value of the US dollar has jumped significantly in the wake of Powell's hawkish guidance after the question hovered over the market for the past week.
Representatives of the European central bank also gave hawkish indications to continue raising rates in Europe, but the Euro failed to stem the strengthening exhibited by the US dollar.
If examined during last Friday's trading, the price initially showed a bullish pattern after jumping from the support level of 0.99500 and almost reaching the resistance level of 1.01000.
However, prices failed to continue higher as the strengthening US dollar pushed prices back below the 1.0000 parity level.
Closing the trade for the last session last week around 0.99600, the price is also seen moving back below the Moving Average 50 (MA50) barrier level on the 1-hour time frame on the EUR/USD chart with price expectations tending to extend the decline this week.
The opening of the Asian session at the beginning of this week, prices are seen to continue to decline even though the price movement is still slow.
Last week's support level at 0.99000 is expected to be tested before being breached for the price to record the latest 20-year low.
The target for the continued decline is to head towards around 0.98000.
However, if the price increases, the resistance at 1.0000 will be retested for the price to break above the parity level.
A further move higher is still seen to target the resistance at 1.0100 which failed to break last week.
