EUR/USD Plunges, But There's an Interesting Reaction in the $1.0800 Zone!

<p>&nbsp;The Euro suffered a sharp drop in the European session yesterday following the publication of PMI data showing a declining figure for August.</p><p><br /></p><p>Manufacturing activity in Germany recorded a reading lower than forecast by contracting for 14 consecutive months while the service sector recorded its first contraction in 8 months which was below the 50 point level.</p><p><br /></p><p>However, the Euro is seen to recover again in the New York session due to the same data reading for the United States (US) being published, also with a 'red' reading.</p><p><br /></p><p>US services activity grew at its slowest pace in 6 months while manufacturing also posted a lower-than-expected figure.</p><p><br /></p><p>Thus, the depreciation that occurred on the US dollar has re-increased the value of the Euro which experienced the previous fall.</p><p><br /></p><p><br /></p><p><br /></p><p>Observed on the chart of the EUR/USD currency pair for yesterday's Wednesday trading, the price has plunged in the European session from the level of 1.08700 to almost touching 1.08000 at the same time recording the lowest level in the latest 2 months.</p><p><br /></p><p>As expected, there was an attractive price reaction in the important zone as prices surged again in the New York session following the published data.</p><p><br /></p><p><br /></p><p>The price managed to get back up to the initial dive level of 1.087000 and the price leveled around that until the end of the New York session while testing the Moving Average 50 (MA50) barrier level on the 1-hour time frame on the EUR/USD chart.</p><p><br /></p><p>So what are the expectations for further price movements towards the end of this week?</p><p><br /></p><p>If the rebound is successfully displayed, the price breaking the MA50 barrier will retest the 1.09000 zone to go higher.</p><p><br /></p><p>An extended rise could recapture the previous concentration level at 1.10000.</p><p><br /></p><p>However, if the price jumps again, the 1.08000 zone will still be the focus to be tested, which is now a support for the price.</p><p><br /></p><p>If the price finally breaks through 1.08000, a further decline will be expected towards the 1.07000 level for the latest 11-week record low.</p>