Surprised investors when the daily decline on the chart of the EUR/USD currency pair on Thursday yesterday recorded up to more than 100 pips!
Compared to before, the price moved slowly by maintaining the rising pattern since the beginning of the week, but the situation started to change.
This was driven by the market's reaction to the published United States (US) inflation data which saw the reading of the consumer price index (CPI) for September remain at 3.7%, falling short of forecasts for a drop to 3.6%.
The situation increased the tendency for the Federal Reserve (Fed) to continue its monetary policy tightening after a hawkish signal was delivered at the previous FOMC meeting.
The price that touched a high of 1.06400 has plunged throughout the New York session reaching around 1.05300.
The sharp drop in price clearly signaled a bearish trend change when the price fell below the 1.06000 level and started to move below the Moving Average 50 (MA50) line on the 1-hour time frame on the EUR/USD chart.
Some weak price gains were seen in early trading in the Asian session this morning (Friday), but analysts expect further declines in prices.
With yesterday's dive pattern, the price will head towards the concentration level at 1.05000 to test it.
If it breaks through lower, the decline will lead to the support level at the beginning of October around 1.04500.
However, investors need to be aware of the risk of volatile price movements at the end of the week.
The price could rise again with the closest target to be tested seen at around the 1.06000 level which was breached yesterday.
The price reaction at that level will give an indication for the next price movement to resume trading in the next week.
