Yesterday the pair fell and showed a high volatility. The pair was pressured as the Fed made its Interest Rate Decision. As was expected, the regulator hiked the interest rate from 0.25% to 0.5%. At the same time, at the press conference Fed Chair Janet Yellen pointed out that monetary policy will remain loose, while the rate hike is a sign of a trust in economic recovery.
On the other hand, the pair is supported by poor macroeconomic data form the US, where Industrial Production in November shrank by 0.6%, while the Markit Manufacturing PMI fell from 54.0 to 51.3 points.
Support and resistance
Bollinger Bands on the daily chart is moving horizontally while the price range is widening. At the same time, the indicator is forming a signal for a correctional growth. MACD keeps falling. Stochastic reached the oversold zone but continues moving down.
The indicators recommend waiting for clearer trading signals.
Support levels: 1.4956 (8 December low), 1.4922 (local low), 1.4894 (2 December low), 1.4855, 1.4811 (16 April low).
Resistance levels: 1.5000 (psychologically important level), 1.5026, 1.5053, 1.5085, 1.5125, 1.5158, 1.5200 (14 December low), 1.5239 (11 December low), 1.5264, 1.5300.
Long positions can be opened after the price consolidation above the level of 1.5000 with targets at 1.5055, 1.5130 and stop-loss at 1.4970. Validity – 2-3 days.
Short positions can be opened after the breakdown of the level of 1.4920 with targets at 1.4850, 1.4800 and stop-loss at 1.4950. Validity – 2-3 days.