The EURUSD pair had a mixed week on the foreign exchange market last week, and for the lack of a better word remained largely range-bound between the 1.1270 to 1.1340 levels.
While the EURUSD pair has been in freefall in the run up to Christmas, the downside momentum behind the recent sell-off ha started to wane, making some traders worried that is could be time for a solid rebound to take place.
Failure to move above the 1.1350 level this week and the EURUSD pair could be sold aggressively lower, and alternatively, if the EURUSD pair fails to hold below the 1.1300 level then it could be time to consider buying.
With the threat of Omicron and the fact that the FED are tapering, I am not sure if it wise to buy the EURUSD pair, hence it could be time to turn to technical analysis.
I like the Ichimoku indicator because it gives us a clear picture of whether an instrument is bullish or bearish just by looking at its position in regard to the Ichimoku cloud.
Additionally, we can also see the future pricing expectation, with the 26 bars forward future cloud. I also like the fact that we can drill into the Ichimoku cloud via multiple time frames.
EURUSD Near-Term Technical Analysis
The one-hour time frame clearly shows that the EURUSD pair is bullish in the near-term. The EURUSD pair is trading above the Ichimoku cloud, and the Lagging Line (Green Line) is above the cloud.
The primary buy signal when using this indicator is the lagging line being above the cloud, alongside price. The recent test towards the bottom of the cloud has also held.
Please also note the far-right cloud, which is noting that in the next 26 -hours the EURUSD pair will need to trade above the 1.1330 level to maintain the bullish bias.
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EURUSD Short-Term Technical Analysis
The four-hour time frame shows that the EURUSD pair is bullish at the moment, with the price holding above the cloud, and the Lagging line above the cloud.
A break above the 1.1380 area and upside risks will build significantly. A reversal from current level back towards the 1.1200 level is needed to confirm a head and shoulders pattern.
Please note that the EURUSD pair has been trading sideways, and this is one of the drawbacks if Ichimoku analysis. Meaning, when price is in consolidation it has its limitations.
Still, we need to look at other time frames when an asset moves into an extended period of price consolidation.
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EURUSD Medium-Term Technical Analysis
Looking at the daily time frame a bearish picture has emerged, with the EURUSD pair being rejected every time the price moves towards cloud resistance.
With the Lagging line also under the cloud, selling rallies is probably the best option while the price remains capped under the 1.1350 area. Additionally, no buy signals are in place over the medium-term yet.
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