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EURUSD Doji Bar at Bear Trend Line

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Market Overview: EURUSD Forex

The EURUSD Forex traded higher but closed as a EURUSD doji bar at bear trend line. The bulls did not get follow-through buying. The bull needs to break far above the major bear trend line to increase the odds that the selloff has ended. The parabolic wedge increases the odds that we will see at least a small pullback beginning within the next 1 to 3 weeks.

EURUSD Forex market

The Weekly EURUSD chart

EURUSD Doji Bar at Bear Trend Line on weekly chart
  • This week’s candlestick on the weekly EURUSD Forex chart was almost a perfect EURUSD doji bar closing slightly below last week’s high.
  • Last week, we said that odds continue to slightly favor the EURUSD to trade at least a little higher. 
  • This week traded above last week’s high but closed as a EURUSD doji bar below it. It is a sign of a loss of momentum.
  • Bulls got a reversal higher from a wedge bottom (May 13, July 14 and Sept 28) and a trend channel line overshoot. 
  • They want a failed breakout below the 7-year trading range. The EURUSD has reversed back above the 7-year trading range low now.
  • Since the September low, the bulls have created bigger bull bodies with closes near their highs with follow-through buying, while the bear bars are weak with no follow-through selling. 
  • The move-up is in a tight bull channel. Odds slightly favor at least a small second leg sideways to up after a pullback. 
  • The bulls hope that the market is now Always In Long. 
  • They need to break far above the major bear trend line to increase the odds that the selloff has ended. 
  • The bears want a reversal lower from a lower high around the major bear trend line or around the May high. 
  • They then want a retest of the September low followed by a strong breakout and a measured move down based on the height of the 7-year trading range. This will take them to the year 2000 low. 
  • The bears hope the EURUSD is forming a parabolic wedge bear flag (Oct 4, Nov 15, and Dec 5). 
  • They want a reversal lower from a double top bear flag (with Jun 27 or May 30 high) or around the major bear trend line.
  • Because of the strong move-up, the bears will need a strong reversal bar or at least a micro double top before they would be willing to sell more aggressively. 
  • Since this week was a doji bar, it is a neutral signal bar for next week. 
  • For now, odds continue to slightly favor sideways to up.
  • However, the parabolic wedge increases the odds that we will see at least a small pullback beginning within the next 1 to 3 weeks.

The Daily EURUSD chart

EURUSD Daily: Wedge Top, Micro Double Top
  • Monday traded higher but reversed into a bear bar with follow-through selling on Tuesday. Wednesday traded lower but reversed into a weak outside bull bar.
  • Friday retested the 5 December high but closed as a bear bar, forming a micro double top.
  • Previously, we said that the odds slightly favor the EURUSD to trade at least a little higher. The parabolic wedge and double top increase the odds of a deeper pullback within 1 to 3 weeks. 
  • The bulls got a failed breakout below the 7-year trading range. 
  • They got a reversal higher from a wedge bottom (May 13, July 14 and Sept 28) and trend channel line overshoot following a sell climax.
  • Before October, they were not able to create sustained follow-through buying. However, the current spike and channel up is a change in the market’s character. 
  • They hope that the market has flipped into Always In Long.
  • If there is a pullback, the bulls want a reversal higher from a higher low major trend reversal and a larger second leg sideways to up.
  • The bears see the recent move up as a 50% pullback from the February selloff.
  • They want a reversal lower from a double top bear flag (Jun 27 or May 30) and a micro double top (Dec 5 and Dec 9). They also have a wedge top (Nov 15, Nov 24, and Dec 5).
  • Bears want a retest of the September low followed by a strong breakout and a measured move down based on the height of the 7-year trading range. That would take them to the year 2000 low.
  • However, the move-up is in a tight bull channel. They will need to create strong consecutive bear bars closing near their lows to increase the odds of a retest of the September low.
  • For now, the bull bars are becoming smaller with overlapping price action. It is a loss of momentum from the bulls.
  • Odds slightly favor the EURUSD to still be in the sideways to up phase. 
  • However, the wedge top and micro double top increase the odds of a deeper pullback which can begin at any moment.

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