FxWirePro- EURGBP Trade Idea

The pair has been trading in a narrow range between 0.83219 and 0.82640 for the past week. Intraday bias remains bullish as long as support 0.8220 holds. It hit an intraday high of  0.83114 and is currently trading around 0.83110.

In contrast, the December 2024 S&P Global UK Construction Purchasing Managers' Index (PMI) came at 53.3, declining from 55.2 in November. Such a level had not been found since June of last year as the lowest increase reported to date in this sector. Household construction was poor, dropping for the third consecutive time. Commercial constructions are still outpacing and have reached the index at 55.0, followed closely by civil engineering at 52.9. New orders have also declined for three consecutive months driven by weak demand as well as concerns over high borrowing costs. Despite slowdowns, close to 48% of respondents still expect growth of output in 2025, but the economy and the proposed cuts in the budget continue to worry respondents. Altogether, though the PMI reading above 50 does show growth, the decline from earlier months indicates trouble for the construction sector in the future.

Technical Analysis

The pair is currently trading above the 34- and 55-EMA on the 4-hour chart.

• Bearish Trend Confirmation: Any break below 0.8260 confirms an intraday bearish trend. A drop to  0.8220/0.8190 is likely.
   
• Near-Term Resistance: Current resistance is around 0.8325. Any violation above will push towards 0.8340/0.8360/0.8380/0.845/0.8500. The bearish outlook would be invalidated only if the price goes above 0.8500.

Indicator Analysis (4-hour chart)

• CCI (50): Bullish
• Average Directional Movement Index: Bullish

Trading Recommendation

It is good to buy on dips around 0.8285-88, with a stop loss set at 0.8220 and a target price of 0.8480.