With the Euro rapidly approaching the major retracement zone at 1.3577 to 1.3744, traders have to be asking themselves if overcoming this area means investors are betting on a rate hike by the European Central Bank or do they believe that Europe is overcoming its fiscal problems.

The aforementioned retracement zone was created by the November 4 top at 1.4282 and the January 10 bottom at 1.2873.

At this time when the Euro was topping, there were concerns over Ireland’s austerity budget. In addition, the widening in peripheral Euro Zone bonds spreads sent investors into the U.S. Dollar.