In line with the forecast when the two Federal Reserve (Fed) central banks raised interest rates by 50 basis points to 4.50% and 2.50% respectively.
After the FOMC meeting, the US dollar failed to show a clear direction when it initially strengthened briefly before weakening again.
The slow market movement continued in the Asian session on Thursday yesterday saw the US dollar strengthen slightly, and a more significant strengthening could be witnessed in the New York session yesterday driven by the hawkish comments of the Fed Chairman, Jerome Powell.
The euro managed to show a temporary strengthening as the reaction to the decision of the European central bank (ECB) meeting was followed by indications of tapering measures for the asset purchase program.
However, the strengthening of the Euro failed to last long when the US dollar was seen to dominate the market until the end of the New York session putting pressure on the European currency.
On the price chart of the EUR/USD currency pair, the price initially shrank slowly towards the RBS (resistance become support) zone of 1.06000 before there was a surge at the beginning of the New York session.
The latest high level was successfully recorded but the 1.07000 zone was seen as a price barrier and then saw the price plunge back around 130 pips to the RBS 1.06000 zone again.
There was a weak bounce shown as trading approached the end of the New York session and continued into the Asian session this morning (Friday) and the Moving Average 50 (MA50) barrier level on the 1-hour time frame on the EUR/USD chart was tested for price.
Being an early indicator of a change in the price trend, if the price rises higher beyond the barrier, the 1.07000 zone will be an important target to be tested again.
A further move higher if successful will push the price towards the next target at 1.08000 for a recent 6-month high.
On the other hand, if the price drops lower if the US dollar continues to strengthen, the 1.06000 zone which is currently a support for the price is likely to be broken.
The price is expected to drop lower towards the concentration zone at 1.05000.
