The results of the FOMC meeting were already known early this morning, which became the main focus of the week's trading.
The Federal Reserve (Fed) kept interest rates unchanged at 5.25% as expected after previously published economic data that prompted the central bank to take such action.
However, the US dollar, which should have weakened, instead displayed a strengthening of its value until the end of the New York session.
This is because the Fed has signaled to raise interest rates by another 50 basis points until the end of 2023.
Despite maintaining the rate, but the hawkish signal shows that the Fed still does not want to end its policy tightening and focus on lowering inflation to the target level.
Next, the monetary policy meeting of the European Central Bank (ECB) will be observed today with the expectation that interest rate increases of 25 basis points will be implemented.
The Euro currency is likely to have the upper hand in trading in the European and New York sessions shortly.
On the chart of the EUR/USD currency pair, the price was initially seen showing a surge to the latest 4-week high of 1.08600.
The increase at the beginning of the New York session was driven by the depreciation of the US dollar after the producer price index (PPI) data of the United States (US) recorded a weak reading.
But the situation changed when the results of the FOMC meeting re-strengthened the US dollar.
The price plunged back to the concentration level of 1.08000 before rebounding and closing the New York trading session around 1.08250.
Price movement was slow at the start of the Asian session this morning (Thursday), but prices were still moving above the support level of the Moving Average 50 (MA50) on the 1-hour time frame on the EUR/USD chart.
There is still no sign of a change in trend, but investors are cautious after expecting the US dollar to start strengthening again after this.
If the price increase continues supported by the ECB meeting results, a break from yesterday's high will push the rise towards the next target at the 1.09000 zone.
The price will also continue to record the latest 5-week high if it manages to maintain the bullish pattern until the end of this week.
But the risk with the expected strengthening of the US dollar is about to start can make the price pattern change against the direction.
Investors should be prepared if the price starts to make a decline below the MA50 support level above 1.08000.
The price drop will continue towards around 1.07000 to test the level for a while and then extend the drop to the 1.06000 zone.
