The currency pair recovered more than 100 pips after Trump announced new tariff measures. It hit an low of 0.89121 and is currently trading around 0.9020. The intraday bias appears to be bullish as long as the support of 0.8890 holds.
In the fourth quarter of 2024, the U.S. economy grew at an annual rate of 2.3%, or 0.6% from the last quarter, confirming earlier estimates but slowing down from the 3.1% growth of the last quarter. The major contributors to the growth were an increase in household consumption, which grew by 4.2%, and rising government spending.
More recent data, however, indicate potential shifts in the economic landscape. During the week of February 22, 2025, new American jobless claims increased to 242,000, higher than economists' forecasts and the highest level since early December 2024. The 22,000 increase in the previous week suggests a likely deterioration in the labor market as more layoffs are taking place in numerous different sectors. Positive in January 2025 was when overall durable goods orders increased 3.1% month-over-month to $286 billion and core durable goods orders (excluding defense and transportation) were up 0.8%.
Technical Analysis and Resistance Levels
The pair is trading above the 34-EMA and 55-EMA on the 4-hour chart indicating a bullish trend. The immediate resistance is at 0.9035 any break above targets 0.9070/0.9100/0.9150/0.9200/0.92250/0.9275/0.9030.
Support Levels and Potential Declines
On the downside, near-term support is around 0.8940, any violation below will drag the pair to 0.8890/0.8800.
Bullish Indicators
CCI (50) - Bullish
Directional movement Index - Bullish
Trading Strategy Recommendation
It is good to buy on dips around 0.8975-78 with a stop-loss at 0.8940 for a TP of 0.9070.
