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EURUSD continues to move higher as we discussed in our technical analysis yesterday. Fundamentally, strong demand and lower yield debt auction in Spain and overall improving market sentiments about Euro zone gave a helping hand to the recent corrective move.

However, these gains could be temporary and Euro downtrend could resume if any negative news comes out. Right now most of the short sellers could be unwinding their positions and gear up for more selling once the rally runs out of steam.

Let’s quickly look at EURUSD daily chart:

Daily Signals (click to enlarge)

EURUSD broke above the Trendline on the daily chart and formed another solid green candle giving us signal that bullish momentum is likely to continue. Next level up is 1.3100 where EURUSD will face Resistance before it could head any higher.

News calendar looks quieter in comparison to yesterday as we only have Existing Home Sales number coming out of US later in the day.

Forex Trading Signal : Primary trade is to look for longs until 1.3100. However, given that it is Friday we may see close of bullish positions from the week and could see a small reversal.

Bullish correction on Euro pairs continued from our technical analysis yesterday. Fundamentally, prospect of fresh money injections from International Monetary Fund raised hopes, as well as successful debt auctions in Germany and Portugal bounced the market up.

Let’s quickly look at EURUSD daily chart:

Daily Forex Signals (click to enlarge)

EURUSD is edging towards the key decision area at 1.2900. This is where we can expect bears and bulls to play it out to gain control. This area also brings some opportunity to get into some good long term trades.

News calendar looks busy dominated by three key news items from US. We have Building Permits, Core CPI m/m and Unemployment Claims later in the day. Needless to say, keep an eye and avoid opening news trades close to these news items.

Forex Trading Signal : Primary trade is to look for short opportunities around 1.2900-10 area.

In case of strong upside movement, wait for breakout and close above 1.2900 and then enter long trades (secondary trade).