A price correction pattern (correction) has occurred on the EUR/USD currency pair chart yesterday after successfully reaching the latest 7-week high.
This situation is seen to have ended the series of price increases that were maintained for 5 consecutive days.
Previously, the price increase had continued following the reaction to the results of the FOMC meeting, which led to a further decline in the US dollar.
But after the price reached the latest high at 1.09300, the price fell back below the 1.09000 zone in the New York session yesterday.
However, analysts still see the price movement is still in a bullish trend, and the price is also still hovering at the support level of the Moving Average 50 (MA50) on the 1-hour time frame on the EUR/USD chart.
This is because the US dollar is still expected to weaken for a longer period due to the dovish message that has been delivered by the Federal Reserve (Fed) for setting their monetary policy while the European Central Bank (ECB) is still not finished in tightening policy.
Manufacturing and service sector data in Europe and the United States (US) will be monitored today which will affect both the Euro and the US dollar.
The price drop is seen to be heading towards the 1.08000 zone and the price reaction will be watched for further movement indicators.
If the price bounces back, the previous bullish trend will continue again and the price is likely to be able to close the trade at the end of this week to a higher level.
Breaking the 1.09000 zone will target the next high which is at 1.10000.
On the other hand, be alert if the price has plunged below the 1.08000 zone and broken through the MA50 support, this will be an early sign of a bearish trend change.
The price can drop back towards 1.07000 or reach the 1.06000 level again.
