EUR/USD trades flat with less volume due to the holiday in the US. It hit a high of 1.05874 yesterday and is currently trading around 1.05376. The U.S. Personal Consumption Expenditures (PCE) data for October 2024 showed that the PCE price index rose by 2.3% year-on-year, up from 2.1% in September, indicating a slight increase in inflation. The core PCE index, which excludes food and energy, climbed by 2.8%. Both personal income and spending increased, primarily driven by services such as health care and housing, while spending on goods declined. These inflation figures suggest that the Federal Reserve may reconsider interest rates since inflation continues to exceed its 2% target.
Technical Analysis Overview
The pair remained above both short-term (34 and 55-4H EMA) and long-term (200-4H MA) moving averages.
Resistance and Support Levels
Resistance Levels: Near-term resistance is at 1.060. A breakout above this could push the pair towards targets at 1.0660/1.070/1.0760/$1.0835, and possibly 1.0900. Major bullish momentum is expected only if prices surpass 1.1000, which would open the door to 1.1070 and 1.1150.
Support Levels: Immediate support is at 1.0490. A drop below this could lead to further declines to 1.0435/1.0400/1.0370/1.0330/1.0240.
Indicator Insights
Indicator Insights (4-Hour Chart): The Commodity Channel Index (CCI) indicates a bullish trend, while the Average Directional Movement Index (ADX) suggests a neutral outlook.
Suggested Trading Strategy
Given the weak sentiment in technical indicators, a sensible strategy would be to sell on rallies around the 1.0570 mark, with a stop-loss at 1.0600 and a target price of 1.04560 for potential gains.
