EUR/USD – Breaks Out of $1.1000 Level, Price Plunges Again!

<p>&nbsp;When there was no expected reaction to the second speech by Federal Reserve (Fed) Chairman Jerome Powell yesterday, the US dollar instead showed a significant strengthening in the New York session after moving rather gloomy in the previous sessions.</p><p><br /></p><p>Powell kept repeating that interest rates will be raised further in an effort to bring inflation down to target levels.</p><p><br /></p><p>Therefore, this situation again prevents the Euro currency from continuing its strengthening which has managed to reach the latest high level in the 6-week trading period.</p><p><br /></p><p><br /></p><p><br /></p><p>On the chart of the EUR/USD currency pair, the price has successfully reached the target at the 1.10000 level after the rising pattern was still maintained before.</p><p><br /></p><p>However, the price started to react in the zone when it bounced back down in the New York session yesterday after the strengthening of the US dollar.</p><p><br /></p><p>The decline of around 50 pips started to slow down and passed above the support level of the Moving Average 50 (MA50) on the 1-hour time frame on the EUR/USD chart.</p><p><br /></p><p><br /></p><p>Giving an early signal for a change in the bearish trend, the price resumed trading in the Asian session this morning (Friday) by moving down below the MA50 level and looks set to test the important zone at 1.09000.</p><p><br /></p><p>If it continues to drop lower, the price can reach back to around 1.08000 to also display an interesting reaction in that area before investors are evaluated for further indications of movement.</p><p><br /></p><p>Meanwhile, if there is a surge again at the end of this week's trade, the price will once again test the resistance of 1.10000 reached yesterday.</p><p><br /></p><p>Breaking through that resistance will support the price to continue rising higher and record a new high level with the target being to reach up to 1.12000.</p><p><br /></p><p>Markets are awaiting the release of manufacturing and services PMI data in Europe and America which will affect both currencies.</p>