The latest data confirms that the US economy is improving, but it has not yet accelerated.

In the US, the job market showed another decrease in the pace of job creation. In Europe, economic growth remains subdued. The Federal Reserve should remain on the sidelines for now, and US stocks could correct short-term.

There is a divergence between the daily/weekly prices and the RSI indicators. Seasonal conditions favor a decline during the summer months. The market could decline to 1940/1920 provide the price does not rise above 2000.

The ECB (European Central Bank) introduced a huge package of measures to inspire economic growth. EURUSD stays under pressure in the medium term, but could rebound to 1.37 short-term.

Technical and fundamental factors seem to support EUR/USD falling to 1.36/1.32 over the medium term. Europe is recovering, but not so fast; U.S. unemployment still an issue.

The US will continue to unleash its bond-buying program, while Europe could cut rates again in the coming months. The US dollar might rise against major currencies until the middle of the year.

There is a divergence between the daily price and the RSI indicator. Seasonal conditions do not support the US dollar in February. A move below 80.10 could target 79.70 provide the price does not rise above 80.70.

After the Fed’s decision to start tapering of its asset purchases in January 2014, the U.S. dollar could increase its value against other major currencies. The study of cycles appears to anticipate the unemployment rate bottoming in 2014 or 2015 at the latest.

During the past weeks, the Federal Reserve has confirmed that employment must improve before changing current monetary policy. Under these conditions, the US dollar should depreciate further and the EUR/USD could challenge 1.38 over the short term.

The standoff between Republicans and Democrats over “Obamacare” is currently unfolding. However, the real test will occur on October 17, when a decision on whether to raise the debt ceiling will need to be made. In the meantime, U.S. stocks are “oversold” at current levels and could rebound to 1700/1720 in the short term.

Five years since the deterioration of the financial crisis, the Federal Reserve is close to modifying its policy.