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:
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.