- EUR/USD is consolidating after hitting low of 1.20014 yesterday. The pair declined almost 60 pips after better than expected US ISM manufacturing data and FOMC minutes meeting. It has shown a minor recovery till 1.20380 and is currently trading around 1.20333.
- US ISM manufacturing index rose better than expected for the month of Dec. it came at 59.7 compared to 58.2 in Nov. The new orders came at 69.4 compared to 64 highest since 2004. The minutes of the Federal open market committee confirmed that US economy is expanding at stronger pace despite hurricane related distortions. Most Fed members indicated that federal tax policy changes will improve the economic growth of US. There was a growing divide within committee on rate hike on low inflation and is expected to stay below target level.
- Technically, near term is around 1.1999 (4H Kijun-Sen) and any break below will drag the pair down till 1.1948 (55- 4H EMA)/1.1900.Minor weakness can be seen only below 1.1800.
- On the higher side, near term resistance is around 1.20920 and any break below will take the pair till 1.2112 (161.8% fib)/1.21850/1.2297 (138.2% fib).
It is good to sell on rallies around 1.2050-55 with SL around 1.2095 for the TP of 1.1970/1.1945.
