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EURUSD Broad Bull Channel

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Market Overview: EURUSD Forex

The last 7 candlesticks (monthly chart) have a lot of overlapping ranges but are sloping slightly up – the market is in a EURUSD broad bull channel following a bull spike from November. The bulls want a strong breakout above the April high followed by a few months of sideways to up. The bears want a reversal from a wedge top and a failed breakout above the April high.

EURUSD Forex market

The Monthly EURUSD Forex chart

EURUSD Monthly: July Bull FT but Long Tail Above
  • The July monthly EURUSD candlestick was a bull bar with a long tail above closing in the lower half of its range.
  • Last month, we said that odds slightly favor July to trade at least a little above June’s high, likely testing near the April/May highs area.
  • July traded far above April/May highs but closed below it.
  • The bears want a reversal down from a wedge top (Feb 2, Apr 26, and Jul 18) and a failed breakout above April/May highs.
  • For a deeper pullback to happen, they needed to create strong consecutive bear bars to convince traders that they are back in control.
  • The problem with the bear’s case is that they have not been able to create follow-through selling (in March and June). 
  • The bulls got another leg up, completing the wedge pattern (Feb 2, Apr 26, and Jul 18).
  • They want a strong breakout above the April high and another strong leg up lasting a few months, like the one which started in November 2022.
  • They got a follow-through bull bar closing above the 20-month exponential moving average in July. However, the long tail above indicates that the bulls are not yet very strong.
  • The last 7 candlesticks have a lot of overlapping range but are sloping slightly up. The market is in a smaller broad bull channel following a bull spike from November.
  • The EURUSD is in a sideways trading range with a slight upside tilt. Traders will BLSH (Buy Low, Sell High) within the trading range.
  • July’s candlestick was a bull bar with a long tail above and closed in the lower half. It is a weaker sell signal bar.
  • The bears need to create strong bear bars with follow-through selling to convince traders that a deeper pullback could be in the cards.
  • For now, odds slightly favor the market to still be in the broad bull channel phase.
  • Traders will see if the bulls can continue to create follow-through buying or will the market stall and reverse lower from a wedge top.

The Weekly EURUSD chart

EURUSD Weekly: PB, EURUSD Broad Bull Channel
  • This week’s candlestick on the weekly EURUSD Forex chart was a bear doji closing in the upper half with a long tail below.
  • Last week, we said that while the EURUSD may still trade sideways to down in the coming week(s), odds slightly favor the market to still be in the broad bull channel phase and favor at least a small retest of the July 18 high after the pullback.
  • The bulls recently got the third leg up forming a wedge pattern (Feb 2, Apr 26, and Jul 18).
  • They want a strong leg-up lasting many weeks like the one which started in November 2022 but did not get follow-through buying above the April high.
  • The targets for the bulls are the Jan/Feb 2022 highs and a measured move up using the height of the prior 6 month’s trading range which will take them to around the October 2021 high.
  • They hope that the last three weeks were simply a pullback and want at least a small leg to retest the July 18 high. They see the market as still being in a broad bull channel.
  • If the market trades lower, the bulls want the 20-week exponential moving average to act as support and form a higher low.
  • They then want another leg up completing the smaller wedge pattern (in the current leg) with the first two legs being June 22 and July 18.
  • The bears hope to get a reversal from a failed breakout above the April high, a wedge top (Feb 2, Apr 26, and Jul 18) and a trend channel line overshoot.
  • They manage to create a pullback testing the 20-week exponential moving average. 
  • The long tails below the last two candlesticks indicate that the bears are not yet strong.
  • The bears need to continue creating consecutive bear bars, breaking far below the 20-week exponential moving average to increase the odds of a reversal down.
  • Since this week was a bear doji closing in the upper half with a long tail below, it is a buy signal bar for next week.
  • While the EURUSD may still trade sideways to down in the coming week(s), odds slightly favor the market to still be in the broad bull channel phase and favor at least a small retest of the July 18 high after the current pullback. This remains true.
  • Traders will see the bulls can create follow-through buying or will the market continue to trade sideways to down around the 20-week exponential moving average area.

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