Last week we looked at EURUSD as it approached trendline on daily chart, we expected price to move lower from 1.4550. Pride did move lower by 100 pips but was not able to sustain the move. This week price has bounced up and opened above the trendline, refer to the chart below:
Also note we have a very bullish candle on weekly chart which engulfed previous two weeks candles and usually such candle would indicate towards upside movement to come. However, we need to be a little cautious as price is quite close to the trendline. I’ll recommend to wait for the daily candle to close above the trendline before looking for long trades.
Panic in market subside after Greece parliament cleared the way for 12 billion Euro bailout as part of austerity plan last week. ECB is likely to increase interest rates this week after Jean-Claude Trichet, ECB president, used the word “strong vigilance” in his last speech.
However, this week focus will return to US dollar as Non-farm payroll numbers are due on Friday. Also note US is celebrating Independence day today and market activity is likely to be subdued.
Considering bank holiday in US and EURUSD close to Trendline, its better to wait for a clear signal. As mentioned earlier wait for daily candle to close above Trendline for a confirmation of uptrend and then look for longs.