The pair gained sharply after dismal UK GDP data. Intraday bias remains bullish as long as resistance 0.8320 holds. It hits an intraday high of 0.84282 and is currently trading around 0.84182.
The UK GDP fell unexpectedly by 0.1% in January 2025 as opposed to the predicted increase of 0.1%, mainly because production decreased by 0.9%, predominantly manufacturing decreasing by 1.1%. Although there was a slight increase of 0.1% in service, construction also decreased by 0.2%. The said contraction has already been experienced in the market through the drop in the Pound Sterling. The surprise deceleration, after the 0.4% rise in December, reflects economic troubles and could shape policy reactions in the future
Technical Analysis
The pair is currently trading above the 34- and below 55-EMA on the 4-hour chart.
- Bearish Trend Confirmation: Any break below 0.8340 confirms an intraday bearish trend. A drop to 0.8320/0.8290/0.8220/0.8190 is likely.
- Near-Term Resistance: Current resistance is around 0.8450. Any violation above will push towards 0.8470/0.8500/0.8580. 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 0.8380 with a stop loss around 0.8340 for a target price of 0.8500.
