Overview:- By analyzing the daily technical chart we can see that pair is heading at 19 month’s fresh high which means it is ending up the year with a full of bullish momentum. Overall this year was a fabulous year from volatility point of view as initially it marked a low of 1.1957 and now it marked a high of 1.3514 level. Overall pair is doing very well for buyers and it is making successively higher highs and higher lows as it is trading in purely uptrend, which indicates that further rally is still awaited. The 1.3500 level is a psychological level so we will get further bullish signal above this level and a daily closing above this level will open the way towards the 1.3350 level.
In our previous report also we mentioned to buy the pair around 1.3120-30 for the target of 1.3260 and 1.3360 sl is 1.3000 level and our both target has been achieved like a cake walk we are expecting that our readers must have made profit from this move.
Fundamental Analysis:- The pair advanced to 1.3422 amid dominant risk appetite but retreated on the back of poor UK data. According to Markit, the preliminary estimate of the December Manufacturing PMI fell to 47.4, below the previous 48.9, and missing the market’s expectations. The same happened to the Services Index, which contracted to 49.
In the Brexit front, UK PM Johnson’s spokesman said that the government plans to start the process for the withdrawal agreement bill before Christmas, and indicated that they plan to bring it back to Parliament as soon as this Friday. Meanwhile, the UK will release its latest employment data this Tuesday, with the ILO Unemployment rate seen ticking up to 3.9% in October from 3.8% in the previous month.
Technical Analysis:- From technical prospective we can see that a double bottom pattern has been formed on the monthly chart and on the weekly along with daily chart a short term uptrend line is lying which is providing strength on the pair and the way bulls are reacting it seems like they are not ready to stop in the early phase however we need a clean sweep of 1.3500 with a daily closing above the mentioned breakout level .
We will keep our view bullish on the pair as long as 1.3100 level remains intact. Odds are in favor of bulls and intraday bias remains bullish on pair. Pair is moving above the minor and major EMA lines which is providing us bullish signal.
The bullish crossover on MACD indicator is providing us bullish signal. .RSI has turned up into overbought territory which suggest some corrections but these correction should be taken as buying opportunity for those who have missed earlier.
What next:- The 1.3500 level is immediate resistance level followed by 1.3600 whereas 1.3150 level is strong key support level followed by 1.3100 level.
Trade idea:- Based on chart and studies above we can suggest that buy the pair around current levels 1.3250-30 target is 1.3360 and 1.3460 sl is 1.3150 level.
