EUR/USD rises above Ichimoku cloud after weak EU unemployment rate

The EUR/USD is in consolidation mode after the latest Eurozone unemployment numbers and as US bond yields start rebounding. It is trading at 1.1815, which is almost 1% above its lowest level in March.

EU unemployment rate steady

Employment in the European Union is struggling as the bloc continues to deal with the coronavirus pandemic. According to Eurostat, the euro area unemployment rate remained unchanged at 8.3% in February. 

In the EU, the rate was unchanged at 7.5%. Precisely, more than 15.95 million people in the Eurozone are still out of work. This performance is relatively weaker than that of comparable countries. For example, on Friday last week, data by the United States revealed that the unemployment rate declined to 6.0%. In the UK, the rate is at 5.0%. 

This performance is mostly because Europe has struggled to deal with the pandemic and the vaccine rollout. Indeed, countries like Germany and France are still implementing some lockdowns to contain the virus. 

Further, the bloc was late in accepting the current vaccines, which has led to a delay in the rollout. For example, while the UK has vaccinated more than 47% of the total population, countries like France, Italy, Spain, and Germany have vaccinated less than 15%. This means that the region could take longer to recover than other western countries.

The EUR/USD is also consolidating as forex investors continue watching the performance of the US bond market. After falling yesterday, the 10-year yield has started to rebound as the market reacts to the strong data from the US. On Monday, the ISM published strong non-manufacturing PMI numbers. And on Friday, the US delivered strong employment and manufacturing data.

EUR/USD technical forecast

The three-hour chart shows that the EUR/USD price dropped to 1.1700 in March this year. Since then, it has attempted to rebound and is now trading at 1.1806, where it is consolidating. A closer look shows that it has formed an inverted head and shoulders pattern, which is usually a bullish signal. 

It has also moved above the Ichimoku cloud, which is another bullish sign. Also, the price is slightly above the 78.6% Fibonacci retracement level. Therefore, the pair may keep rising as bulls target the 61.8% retracement at 1.1900.