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Last week we expected Euro to continue the bullish correction. EURUSD rose 2% last week, credit goes to reports of improvement in talks between Greece and creditors along with better than expected bond auctions from Spain and France.

Though this rally may not last much longer but we could very well try to ride it while it last.

Let’s quickly look at EURUSD daily chart:

Daily Forex Signals (click to enlarge)

EURUSD broke above the trendline on daily chart and came back down to retest on Friday. We can clearly see that price bounced off from the trendline after retest which is a good sign that market is also monitoring the same trendline as us. This week we can expect price to continue moving up towards the next Resistance level at 1.3080 – 1.3100

Keep in mind the holiday in China and other Asian countries as they celebrate beginning of New Year. I won’t be surprised if we see thin markets for a day or two.

Forex Trading Signal : Look for opportunities to go long until 1.3100, once price gets there we can expect a small reversal. We will then wait for clear Breakout above 1.3100 before taking any long trades.

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 Forex 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.