Market Overview: EURUSD Forex
The EURUSD Forex weekly candlestick formed a bull follow-through bar trading far above the 20-week exponential moving average. The bulls want a retest of the April high and a breakout above. The bears hope that this week was simply a deep pullback (bounce) and want a retest of the May 31 low.
EURUSD Forex market
The Weekly EURUSD chart
- This week’s candlestick on the weekly EURUSD Forex chart was a big bull bar closing near its high.
- Last week, we said that odds slightly favor a small second leg sideways to down after the current pullback and traders will see if the bulls can create a follow-through bull bar closing above the 20-week exponential moving average or will sellers sell the first pullback from a tight bear channel.
- The bulls got a strong follow-through bull bar trading far above the 20-week exponential moving average.
- They hope to get at least a retest of the April high after the recent pullback.
- They want the 20-week exponential moving average to act as support and another strong leg up, completing the wedge pattern with the first two legs being February 2 and April 26.
- Since this week was a strong follow-through bull bar trading far above the 20-week exponential moving average, the odds of retesting the April high have increased.
- The bears got a tight bear channel down to May 31 low. That means strong bears.
- They were expecting at least a small second leg sideways to down after the current pullback.
- However, instead of a weak pullback (bounce), the EURUSD spiked higher this week.
- The bears hope that this is simply a deep pullback and want a retest of the May 31 low.
- Since this week was a big bull bar closing near its high, it is a buy signal bar for next week. It is not a strong sell signal bar.
- Odds slightly favor the bull channel resuming in the coming weeks, forming a retest of the April high.
- If the second leg sideways to down (pullback lower) forms and it is weak (with doji(s), bull bars, and long tails below), it may only become a minor pullback, forming a higher low major trend reversal.
The Daily EURUSD chart
- The EURUSD traded higher for the week. Friday traded higher and close as a bear doji.
- Previously, we said that odds slightly favor at least a small leg to retest May 31 Low after the current pullback (bounce).
- The bulls needed to create consecutive bull bars trading far above the 20-day exponential moving average to increase the odds of a retest of the April High. They got that this week.
- They hope that the recent pullback formed a higher low.
- They want another strong leg up completing the wedge pattern with the first two legs being February 2 and April 26. The third leg up is likely underway.
- At the very least, they want a retest of the prior leg extreme high (April 26).
- The spike up this week is strong enough for traders to expect at least a small second leg sideways to up after a pullback.
- The bears got a tight bear channel down from the May high. That means persistent bears.
- They expect at least a small second leg sideways to down after the current pullback (bounce).
- At the very least, the bears want a retest of the recent leg low (May 31).
- However, instead of a weak pullback (with overlapping bars, doji(s), and bear bars), the bulls got a strong spike up with follow-through buying trading far above the 20-day exponential moving average.
- The bears will need to create strong bear bars with follow-through selling to increase the odds of a retest of the May 31 low.
- Since Friday was a small bear doji, it is not a strong sell signal bar.
- If there is a pullback, odds slightly favor the pullback to be minor and for at least a second leg sideways to up after the pullback.
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