Investors were surprised by the results of the European central bank (ECB) meeting yesterday when the interest rate expected to be maintained at 4.25% was raised to 4.50%.
The shock continued again as investors saw a sharp fall in the Euro currency which should have surged when interest rates were raised again.
This is due to the signal by the President of the ECB, Christine Lagarde that this is the last interest rate hike in Europe and will continue for some time until the economy recovers.
Adding pressure to the Euro when the economic data of the United States (US) that followed later recorded a 'green' reading gave a positive signal.
Thus, the US dollar is seen to maintain its previously stagnant strengthening in addition to putting pressure on the declining Euro.
The situation is interpreted on the movement on the chart of the EUR/USD currency pair yesterday which saw the price plunge through the support zone at 1.07000.
The continued decline until the end of the New York session has reached a level around 1.06300 and the price then slowed until it continued at the opening of the Asian session this morning (Friday).
With this bearish signal, the price will be expected to continue the decline to the next concentration level which is at 1.06000.
Next, if the price breaks through that level, the continued decline will target up to around 1.05000.
However, be alert if there is a surprise that occurs at the end of the week with the possible risk of profit-taking activities that commonly occur.
The price can bounce back up and it is expected that the 1.07000 zone will be tested and will change its function as a resistance for the price.
If it manages to pass it, then a higher rise is expected to go to the target of 1.08000 again with the trend change signal.
