The US dollar showed a strengthening value after the positive reaction to the results of the FOMC meeting early this morning following a 75 basis point increase in interest rates by the Federal Reserve (Fed) for the third time in a row in line with market forecasts.
As expected, the Fed continuing its monetary policy tightening has pushed the US dollar to strengthen while putting pressure on other major currencies.
Fed Chairman Jerome Powell also sounded hawkish in a follow-up statement signaling that rate hikes will continue until 2024 and there will be no rate cuts throughout the next year.
Examining the price movement on the chart of the EUR/USD currency pair, the price has recorded a new 20-year low following the strengthening shown by the US dollar.
The Euro currency will receive a bad fate for now and will have to endure the dominance of the US dollar.
The price on the chart is seen to have continued its decline lower until it continued in the Asian session this morning, breaking past the previous support level at 0.98800.
The price drop in the Asian session is seen hovering at a new low of around 0.98000 which is assessed as a price target support zone.
However, with the momentum displayed after the results of the meeting, the price is seen to be more likely to continue its decline further and continue to break the latest record low since 2002.
The lower price target is likely to reach around 0.97000 or 0.96000 if the US dollar maintains its excellent performance.
However, if on the contrary there is a price rebound, the initial increase is seen to test the resistance at 0.98800 in the SBR (support becomes resistance) zone.
And if there is an indication of a bullish trend change again, the price can target an increase towards the 1.0000 parity level again.
