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We have an interesting week ahead of us. Market focus, so far, has been on Euro zone debt crisis. This week US Dollar is likely to come under pressure.

By Wednesday a deal needs to be negotiated by a “supercommittee” regarding debt reduction. Also keep in mind upcoming Thanksgiving holiday in US, hence the trading week will be cut short.

Let’s look at EURUSD weekly chart:

Weekly Forex Signals (click to enlarge)

Price has steadily moved lower since the last three weeks, after it tested the Trendline above. Most likely we will see a sell-off towards the lower Trendline and then a bounce up from there.

Daily Forex Signals (click to enlarge)

On the daily chart price broke below the Trendline last week and then came back to re-test on last Friday. Currently price is below the Trendline, and close the to key area which is at 1.3550-70.

Keep an eye on Existing Home Sales data from US later in the day. Other than that there is no significant news release due today.

Forex Trading Signal : Look for short if price reaches 1.3350 area targeting low of daily range at 1.3430. If price manages to break above the 1.3350-70 area then look for longs on the pullbacks.

Another trade setup occurs when price breaks below 1.3430-20, opening room for further shorts until 1.3250.

EURUSD managed to close below the Trendline that we have been watching on the daily chart, signalling more sell off to come in near future.

Today, so far we are seeing slight bullishness on Euro dollar which could been a result of Fitch comments about Euro debt worries effecting US banks, lowering demands for US dollars.

Let’s quickly look at EURUSD daily chart:

EURUSD Forex Signals (click to enlarge)

Price clearly broke and closed below the Trendline yesterday. So far today the bullishness we are seeing could lead to the re-test of Trendline at around 1.3550. This is the key area where bulls and bears will fight it out to take control.

Today we have important economic news items, Building Permits and Unemployment Claims, due out from US later in the day. Avoid opening new trades closer to the news release.

Forex Trading Signal : Stay with trend and look for shorts near the 1.3550 area. If price manages to break above this area then look for longs with caution.

So far this week EURUSD has moved fair bit already, I doubt there is much steam left. We may very well see a sideways movement today and tomorrow.