The market finally found an answer at the FOMC meeting early this morning when the interest rate hike by the Federal Reserve (Fed) met expectations to be raised lower by 25 basis points to the latest level of 4.75%.
This has had the effect of a significant drop in the value of the US dollar until it reached a 9-month low after investors looked into the dovish tone of Fed President Jerome Powell's follow-up statement.
Although the Fed still maintains the objective of lowering inflation to the target level of 2%, Powell signaled that this low interest rate increase will continue for several more meetings after this.
Although seeing the measure of interest rate cutting is not suitable to be implemented this year, but does not deny that the matter will happen.
The price chart of the EUR/USD currency pair saw the price surge past the 1.09000 resistance zone and finally reached the target level at the latest high at 1.10000.
A daily increase of around 150 pips was exhibited after the market reacted to the results of the meeting which saw the US dollar shrink further.
A bullish signal was assessed earlier yesterday when the price had started to move above the Moving Average 50 (MA50) support level on the 1-hour time frame on the EUR/USD chart.
But investors need to be cautious as the market awaits the outcome of the European central bank (ECB) policy meeting and also ahead of the United States (US) NFP jobs report at the end of the week.
Continuing trading in the Asian session this morning (Thursday), the price is seen to be continuing its upward momentum when it has passed the 1.10000 level with the expectation that the increase will continue in the following sessions.
For the expected further increase, the price is seen to advance towards the target at the next concentration zone, 1.12000.
Reaching that level would set a new 11-month high.
However, be alert if the price surprises by showing a downward pattern towards the end of the week.
If there is a drop again, the price will test the 1.09000 zone which was previously a resistance zone for the price.
If the zone fails to bounce back, the decline will continue towards the 1.08000 zone.
