EUR/USD lost its shine after ECB rate cut. It hit a intraday low of 1.04691 and is currently trading around 1.04941.
On December 12, 2024, the European Central Bank (ECB) held a meeting and decided to lower its interest rates, which is an important move in its monetary policy.
Here are the main points from the meeting:
Deposit Facility Rate: The ECB lowered the deposit facility rate by 0.25%, bringing it down to 3%. This is the third time this year that they have made this reduction.
Main Refinancing Operations Rate: The Main Refinancing Operations Rate was also cut by 0.25%, now set at 3.15%.
These changes aim to support the economy by making borrowing cheaper.
Technical Analysis Overview
The pair remained below 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 1.0550. A breakout above this could push the pair towards targets at 1.0600/1.0660/1.070/1.0760/$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 1.0460. 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 1.0518-20 mark, with a stop-loss at 1.0570 and a target price of 1.0435/1.0400 for potential gains.
