FxWirePro- EURUSD Trade Idea

EUR/USD has experienced a nice pullback after a significant sell-off, reaching a low of 1.0220 and currently trading around 1.03863.

The US Final Services PMI insights

The US Final Services PMI in December 2024 was 56.8. This is down from an initial estimate of 58.5 but up a little from 56.1 in November. This, therefore, implies that the services sector is still growing since the figure is still above the neutral level of 50, albeit at a lower rate than anticipated. Employment in the services sector has grown for the first time in five months, and business confidence stands at an 18-month high. In addition, cost inflation has come down to its lowest in the last 11 months, making it easier for service providers. Therefore, this report probably also gives a mixed flavor for the US economy as it came close to ending in 2024, which might have some implications for decision-making by the Federal Reserve.

Technical Analysis of EUR/USD

On the 4-hour chart, the EUR/USD pair stays below short-term (34 and 55-EMA) as well as long-term (200-EMA) moving averages. Near-term resistance is seen at 1.0450; a break above this may push the pair to targets of 1.04635, 1.0500, 1.0550, and 1.0600. Major bullish momentum is likely only if prices can break above 1.0660, where levels of 1.0700, 1.0760, and 1.0800 await. On the downside, support is seen at 1.0340, with further levels down at 1.0300 and 1.0240.

Market Indicators and Trading Strategy

Both the Commodity Channel Index (CCI) and the Average Directional Movement Index (ADX) are indicating a bullish trend. A good strategy would be to buy on dips around 1.0365-68, with a stop-loss set at 1.0300 and a target price of 1.0500.