The results of the FOMC meeting early this morning have seen an attractive market reaction with aggressive price movements, especially for the US dollar currency.
The Federal Reserve (Fed) met forecasts to raise interest rates by 75 basis points to 4.00%, making the hike at such an aggressive rate the 4th meeting in a row.
The US dollar initially shrank following the market's assessment of the early speech by the Fed Chairman, Jerome Powell, who was quite cautious and perhaps a little dovish. However, in the end, he gave a clear signal for the central bank to continue aggressive policy tightening with a commitment to bring inflation down to the target level.
The US dollar then showed a strengthening until the end of the New York session.
On the price chart of the EUR/USD currency pair, the price is seen to make an increase initially testing the resistance at 0.99500 which is the level reached last Tuesday.
However, the price then plunged back around 160 pips to reach the 0.98100 level to resume the previous downtrend.
The re-movement of the price below the barrier level of the Moving Average 50 (MA50) on the 1-hour time frame on the EUR/USD chart remains a bearish signal with the expectation that the price will continue to decline further.
Passing the support level at 0.98000, the price is seen to head towards the previous focus zone around 0.97000 to record the latest 3-week low.
However, if the price rebounds again towards the end of the week, the 0.99000 zone will be the initial resistance tested by the price.
Breaking through the next MA50 barrier will push the price up to around 0.99500 after a price trend change signal.
Although the FOMC meeting indicated a tendency for the strengthening of the US dollar, investors will remain cautious ahead of the US NFP employment data report at the end of the week which could affect volatile price movements.
