The EUR/USD price rally has lost steam in the past few hours. The pair is trading at 1.2125, which is slightly below yesterday’s high of 1.2150. Still, the EURUSD is on track for the first weekly gain in three weeks.
EUR/USD news: The pair reacted to the relatively weak US jobless claims released yesterday. The data showed that the number of Americans who filed for initial jobless claims last week dropped from 812k to 793. While good, the figure was worse than the median estimate of 767,000.
Similarly, the continuing jobless claims dropped from 4.69 million to 4.54 million in the same period. The numbers came after the US released weak consumer price index (CPI) data and a few days after the weak nonfarm payroll numbers.
EUR/USD technical outlook
The hourly chart shows that the EUR/USD price has been on a strong uptrend recently. However, in the past two days, the pair has formed a rectangle pattern whose support and resistance are at 1.2112 and 1.2143, respectively. The price is also at the same level as the 25-hour and 15-hour moving average. However, the current consolidation seems like a bullish flag pattern.
Therefore, there is a possibility that it will break-out higher in the near term. However, there are also signs that the pair is forming a bearish divergence pattern as evidenced by the Relative Strength and MACD. As such, the alternate scenario is where the price breaks out lower.
EURUSD technical chart