[reactjs] Invalid hook call. Hooks can only be called inside of the body of a function component

I have just started using hooks and I got the above warning when i was calling useEffect inside a function:

Then I have to move the useEffect outside of the function as belows:

 const onChangeRetypePassword = async value => {
  await setRePassword(value);
//previously useEffect was here

  };
//useEffect outside of func 

 useEffect(() => {
  if (password !== rePassword) {
  setPasswdMismatch(true);

     } 
  else{
    setPasswdMismatch(false);
 }
}, [rePassword]);

Hope it will be helpful to someone !

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