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EURUSD Failed Breakout below 7-Year Trading Range Low

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Market Overview: EURUSD Forex

The EURUSD Forex bulls want a EURUSD failed breakout below the 7-year trading range low. This week spiked up and closed slightly above the 7-year trading range low. They will need to create a follow-through bar to increase the odds of higher prices. The bears see this week as a breakout test of the 7-year trading range low. 

EURUSD Forex market

The Weekly EURUSD chart

EURUSD Failed Breakout below 7-Year Trading Range Low on Weekly Chart
  • This week’s candlestick on the weekly EURUSD Forex chart was a big bull bar closing near the high.
  • Last week, we said that odds slightly favor the EURUSD to still be in the sideways to up pullback phase.
  • This week broke far above the 1.000 Big Round Number, the 20-week exponential moving average and the bear channel. 
  • The bulls hope that the recent 10-week trading range (July to Sept) is the final flag of the move. 
  • They 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. This week spiked up and closed slightly above the 7-year trading range low.
  • Previously, the bulls kept failing to get sustained follow-through buying since 2021. 
  • The last 4 consecutive bull bars are the longest streak since the selloff started in 2021. It is a change in the market’s character.
  • The bulls needed to create more consecutive bull bars closing near their highs to increase the odds that the selloff has ended. 
  • Since this week was the breakout bar (above the double top bear flag, 20-week exponential moving average, bear channel), the bulls need to create a follow-through bull bar to confirm the breakout.
  • The bears want a strong breakout below the 2017 low, 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 move down was in a tight bear channel. That means strong bears. 
  • However, the bear trend has also lasted a long time and is climactic.
  • While the breakout below the July-August low in September was strong, the bears failed to get follow-through selling.
  • The bears hope the last 7 weeks were simply a wedge bear flag and want at least a retest of Sept low. 
  • However, instead of forming a weak 3rd leg up, this week was a strong breakout above the first 2 legs.
  • The bears see this week as a breakout test of the 7-year trading range low.
  • If next week trades higher, they want the EURUSD to stall and reverse lower again from a double top bear flag (with Aug 10 or Jun 27 or May 30 high) or around the major bear trend line.
  • Since this week was a big bull bar closing near the high, it is a weak sell signal bar and a good buy signal bar.
  • Odds continue to favor the EURUSD to still be in the sideways to up pullback phase.
  • Traders will see if the bull can get a least at decent follow-through bull bar next week. 

The Daily EURUSD chart

EURUSD Daily: Strong Breakout above Bear Channel
  • The EURUSD traded higher for the week with a brief pullback on Thursday which reversed into a big outside bull breakout bar. Friday was a follow-through bull bar closing near the high.
  • Previously, we said that odds slightly favor the EURUSD to still be in the sideways to up pullback phase.
  • This week spiked up and closed slightly above the 7-year trading range low.
  • The bulls want a failed breakout below the 7-year trading range.
  • They hope that the recent 10-week trading range pullback (July to Sept) is the final flag of the move down which started in February. 
  • The bulls got a reversal higher from a wedge bottom (May 13, July 14 and Sept 28) and trend channel line overshoot following a sell climax.
  • Since 2021, they were not able to create sustained follow-through buying. However, the current spike up is a change of the market’s character. 
  • The bulls manage to create consecutive bull bars closing near their highs breaking far above the small trading range, the bear channel and above the 1.00 Big Round Number.
  • They hope that the market has flipped into Always In Long.
  • The move up from Nov 3 higher low major trend reversal is strong enough for traders to expect at least a small second leg sideways to up after a pullback.
  • The bears want a 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.
  • They want a retest of the September low followed by a strong breakout with follow-through selling. 
  • They hope the current move is forming a double top bear flag (Aug 10 or Jun 27 or May 30).
  • The bears see this week as a buy vacuum of the 7-year trading range low breakout point.
  • Since Friday was a strong bull bar, it is a weak sell signal bar for Monday.
  • Odds continue to favor the EURUSD to be in the sideways to up pullback phase.
  • Traders will see if the bulls can create consecutive bull bars trading far above the 7-year trading range low or fail to do so.

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