The EURUSD has been consolidating sideways since the beginning of August (dashed red rectangle). This has largely coincided with the slowdown in the rate of change of the US M2 money supply. Ichimoku is trend following and if the EURUSD continues to consolidate we will expect whipsaw signals. We do note that today’s candle (still to complete) is a hammer (blue arrow). I.e. bears have lost control at the day’s low and bulls are now in charge. This also happened at cloud support. The fact that the black base line is still trending up does suggest that the underlying momentum still has an upwards bias.
To this end, we are watching to see if:
The orange lagging line moves convincingly back above the candles.
If the price moves back above the black base line.
If these do happen, it will be regarded as bullish developments for the EURUSD pair.
Past performance is not an indicator of future results
CHART SOURCE: FXCM Marketscope 2.0
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