Yesterday volatility in the pair was high due to the publication of a large number of macroeconomic statistics.
The pair was supported by data on the ZEW Survey – Economic Situation in Germany that in December grew from 54.4 to 55.0 points, while was forecasted to decline to 54.2 points. At the same time, data on consumer inflation for November from the US supported the pair. The consumer Price Index grew to 0.5% that was also better than forecasts.
Today attention of the markets is focused on the Fed Interest Rate Decision. The regulator is expected to increase the rate from its current 0.25%.
Support and resistance
Bollinger Bands on the daily chart is moving up while the price range is narrowing from the top. MACD turned down and formed a weak sell signal. Stochastic is rapidly falling suggesting a downward impulse can weaken shortly.
Indicators recommend waiting for clearer trading signals.
Support levels: 1.0900 (local lows), 1.0843, 1.0795 (7 December low), 1.0762, 1.0706, 1.0673.
Resistance levels: 1.1000 (local high), 1.1059 (local high), 1.1100, 1.1153 (22 October high), 1.1200, 1.1245.
Short positions can be opened after the breakdown of the level of 1.0900 with targets at 1.0820, 1.0730 and stop-loss at 1.0940. Validity – 2-3 days.
Long positions can be opened after the breakout of the level of 1.0970 (with the appropriate indicators signals) with targets at 1.1030, 1.1100 and stop-loss at 1.0930. Validity – 2-3 days.