EURUSD OO Pattern but Dojis

Market Overview: EURUSD Forex

The EURUSD Forex weekly chart formed an EURUSD OO pattern above the 20-week exponential moving average. So far, the bears have not yet been able to create follow-through selling below the 20-week EMA. The bulls want a second leg sideways to up but so far, have not yet been able to create consecutive bull bars.

EURUSD Forex market

The Weekly EURUSD chart

• This week’s candlestick on the weekly EURUSD Forex chart was a consecutive outside doji closing above the middle of its range.
• Last week, we said that traders will see if the bears can get a strong break below the 20-week EMA or will the bulls get a follow-through bull bar.
• This week traded below the 20-week exponential moving average but reversed to close above it again, forming an OO (outside-outside) pattern,
• The last 4 candlesticks are mostly overlapping and stalling above the 20-week exponential moving average.
• The bears got a reversal down testing the 20-week exponential moving average from a wedge top (Nov 15, Dec 5 and Feb 2).
• They want a second leg sideways to down from a lower high major trend reversal (Mar 15).
• The next targets for the bears are the January 6 low and the November 21 low. 
• The bears need to create consecutive bear bars trading far below the 20-week exponential moving average to convince traders that a retest of the September low is underway.
• If the bears do not create strong follow-through selling below the 20-week exponential moving average within a few weeks, the market will likely do the opposite and attempt to retest February high instead. This remains true.
• If the EURUSD trades higher, they want a reversal down from a lower high major trend reversal or a double top with the February high.
• The bulls got a strong spike and channel up from September 2022 and the market may have flipped into Always In Long. 
• The strong move up increases the odds of at least a small second leg sideways to up after the current pullback. 
• So far, the second leg sideways to up is weak with overlapping candlesticks.
• They hope to get a reversal up from a double bottom bull flag with January 6 low. They will need to create strong consecutive bull bars closing near their highs to convince traders that a retest of the February high is underway.
• The bulls want the 20-week exponential moving average to remain as support.
• They need to create strong consecutive bull bars closing near their highs to increase the odds of a retest of the February 2 high.
• If the EURUSD trades lower, the bulls want a reversal up from a higher low major trend reversal.
• An OO (outside-outside) pattern means the EURUSD is in breakout mode. However, both candlesticks are dojis within a tight trading range. The EURUSD is in an area of balance.
• Traders will wait for a breakout from either direction with follow-through price action for more clarity.
• For now, traders will see if the 20-week exponential moving average continues to act as support or will the bears get a break below instead.

The Daily EURUSD chart

• The EURUSD continue to trade sideways around the 20-day exponential moving average forming a small expanding triangle.
• Last week, we said that traders will see if the bears can create strong follow-through selling breaking far below the 3-week trading range and if they continue failing to do so, odds will swing in favor of a retest of the February high within a couple of weeks.
• This week broke above and below the trading range with no follow-through price action.
• The bears see the move up since September as a 50% pullback of the selloff which started in May 2021.
• They got a pullback testing January 6 low from a wedge top. They want a second leg sideways to down from a lower high major trend reversal (Mar 15) and a double top bear flag (Mar 7 and Mar 15).
• The next targets for the bears are the January 6 low and the November 21 low which was the start of the bull channel.
• The bears need to create consecutive bear bars closing near their lows trading far below the January 6 low and November 21 low to convince traders that a retest of the September low could be underway.
• The bulls got a strong spike & channel up from October.
• The move up was strong enough to have flipped the market into Always In Long. 
• The bulls want a larger second leg sideways to up to retest February high from a higher low major trend reversal and a double bottom bull flag with January 6 low.
• So far, the second leg sideways to up is weak with a lot of overlapping candlesticks.
• The bulls need to create consecutive bull bars closing near their highs breaking far above the March 15 high to increase the odds of a retest of the February high.
• The EURUSD formed a small expanding triangle around the 20-day exponential moving average which is a breakout mode pattern.
• Traders will wait for a breakout from either direction with follow-through price action for more clarity.
• If the bears continue to fail to break below January 6 low, odds will swing in favor of a retest of the February high within a couple of weeks.

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