Impact on EURO

Today, the focus has shifted to major economic events. Today, if the German data favours improvement, the Euro might be supported at today's session. The German flash PMI manufacturing is expected to show an uptick at 50.2 or 50.4 in December.

Impact on USD

The US dollar was ignited by the stronger industrial production data. Industrial production jumped 1.3 percent after a 0.1 percent increase in October. But the another data such as building confidence drops 1 point in December. Following a four-point uptick last month, builder confidence on the market for newly built single-family homes fell one point in December to 57 according to the National Association of Home Builders/Wells Fargo Housing Market Index (HMI), released yesterday. After the mixed US data, traders are keeping an eye on the Federal Reserve meeting this week. Today, the focus has shifted to US building permits and flash manufacturing PMI.

Technical view:

The pair managed to break out from the falling wedge and it is trading above it. The pair has been facing strong resistance at 1.2500. On the long-term perspective, the pair has been taking support from the neckline on the monthly chart. In this case, a break below the neckline ignites new bearish moves towards a larger decline in the coming months. In case, a monthly close is below 1.2230 and 200Msma, bears can challenge 1.2000 and 1.1875 in the new year. Ahead of today's economic data and tomorrow's major key event (the FOMC meeting), the pair managed to trade in green. The pair has intraday support at 1.2400. We recommend selling below 1.2400 and 34hrsma with the targets at 1.2375, 1.2360, 1.2340, and 1.2300. On the upper side, the pair has resistance at 1.2500, 1.2507, 1.2530 and 1.2600. We can expect strong momentum only above 1.2600 with the targets at 1.2800 and 1.2880.

Trade: sell below 1.2400.