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The pair surged sharply after mixed US economic data. Overall bias remains bullish as long as support 0.8780 holds. It hit a high of 0.89646 at the time of writing and is currently trading around 0.89644.
The latest S&P Global Flash PMIs for December 2024 show mixed trends in the U.S. economy. The Manufacturing PMI dropped to 48.3 from 49.7 in November, indicating a contraction in manufacturing activity due to weak export demand. In contrast, the Services PMI rose to 58.5 from 56.1, showing strong growth in the services sector, the highest since the COVID-19 lockdowns. This growth is expected to boost overall economic growth, with GDP rising over 3% for December. The differences between the two sectors suggest that policymakers will need to consider both when making decisions about the economy.
Technical Analysis
The pair is currently trading above the 34- and above 55-EMA on the 4-hour chart.
Near-Term Resistance: Current resistance is at 0.8970. A break above this level could lead to targets at 0.9000/0.90480. The break above 0.87500 confirms that decline from 0.9225 got completed at 0.83750.
Immediate Support: The next support level is at 0.8890. If this level is broken, the pair could drop to 0.8850/0.8835/0.8800/0.8780/0.8750/0.8720/0.8700/0.8660/0.8600/0.8580, 0.8550, 0.8525, 0.8499, 0.8440, 0.8420, 0.8390, 0.8365 (61.8% Fibonacci projection), or even 0.8340.
Indicator Analysis (4-hour chart)
- CCI (50): Bullish
- Average Directional Movement Index: Bullish
Overall, the trend remains bullish
Trading Recommendation
Consider buying on dips around 0.8948-50, with a stop loss set at 0.8890 and aiming for a target price of 0.9070.
