On the euro versus dollar 1-hour chart, the pair is getting mixed signals from the Ichimoku Kinko Hyo technical indicator. It appears that a bit of market consolidation is in the cards, although it might also be a sign that a quick pullback is taking place.
The price of euro versus dollar is still moving below the resistance levels marked by the orange lines but it also crossed above the blue line, indicating a potential rally. The red line is currently moving sideways, indicating a possible short-term consolidation.
Meanwhile, the green line is making its way back up after crossing below the price and signaling a selloff a few days ago. This could mean that the pair might resume its climb, as seen on the longer-term time frames.
Euro Versus Dollar Technical Outlook
This could all hinge on the upcoming ECB interest rate decision or the US non-farm payrolls release during the latter half of the week. Remember that a few ECB officials have noted that the region might need additional easing measures, from negative deposit rates to more bond purchases, in order to ward off deflation and keep the euro’s gains in check. In doing so, the central bank could ensure that the euro zone stays on track to recovery, although ECB member Nowotny already said that the region may be out of a recession already.
In addition, the US economy might be in for another round of labor market weakness, which might lead to a gain for the euro versus dollar pair. Fed Chairman Yellen did mention in her testimony that the jobs sector could use continued support from a period of low interest rates, a change from her previous hawkish interest rate hike time frame in the latest FOMC interest rate statement.
If EUR/USD rallies past the resistance levels marked at 1.3812 and 1.3854, it could be indicative of a longer-term uptrend for the pair, especially if the red line also confirms trending market behavior and the green line gives a buy signal.
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