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EURUSD sideways to up pullback phase continues

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Market Overview: EURUSD Forex

EURUSD sideways to up pullback continues on the weekly chart. The bulls have not yet been able to create strong consecutive bull bars since breaking below the 2017 low. If the pullback remains sideways, odds are the bears will return for a re-test of the July low. 

EURUSD Forex market

The Weekly EURUSD chart

EURUSD Sideways to Up Pullback on Weekly Chart
  • This week’s candlestick on the weekly EURUSD Forex chart was a bear doji bar. 
  • Last week, we said that the EURUSD should still be in the two-legged sideways to up pullback phase.
  • This week traded above last week’s high but reversed to close slightly lower and is mostly overlapping the prior 2 candlesticks.
  • 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, which will take them to the year 2000 low.
  • They got 2 bear bars closing below 2017 low, increasing the odds of a breakout and a measured move down.
  • The move down is in a tight bear channel. That means strong bears. Odds slightly favor the EURUSD trading lower after the current pullback. This remains true.
  • The bulls hope that the sell-off since March was a sell vacuum test of the 7-year trading range low. 
  • They want a reversal higher from a wedge bottom (Mar 4, May 13 and July 14) and a trend channel line overshoot.
  • The bulls hope that the recent 10-week trading range is the final flag of the move down which started in 2021. 
  • They want a failed breakout below the 7-year trading range and a test back into the potential 10-week final flag.
  • However, the bulls have repeatedly failed to create strong follow-through buying since the sell-off.
  • If the current pullback remains sideways, odds are the bears will return to re-test July.
  • For now, the EURUSD may still be in the sideways to up pullback phase.
  • Odds slightly favor the EURUSD to form the second leg sideways to down after the pullback is over.

The Daily EURUSD chart

EURUSD Forex Daily Chart Sideways to Up Pullback Stalling around 20 EMA
  • The EURUSD continues to trade sideways around the 20-day exponential moving average for the rest of the week.
  • The bulls hope that the 10-week trading range (May-June) is the final flag of the move down which started in 2021. They want a failed breakout below the 7-year trading range.
  • The bulls want a reversal higher from a wedge bottom (Mar 4, May 13 and July 14 wedge) and a trend channel line overshoot.
  • So far, they have not yet been able to create consecutive bull bars closing near their highs.
  • The 20-day exponential moving average and bear trend line are resistances above.
  • The bears want a measured move down based on the height of the 7-year trading range. That would take them to the year 2000 low.
  • The move down since July is in a tight bear channel. That means strong bears. Traders expect at least a small second leg sideways to down after the current pullback.
  • Bears want the pullback to be more sideways and stall around the 20-day exponential moving average or the bear trend line. So far, they have this.
  • For now, the EURUSD may still be in the sideways to up pullback phase.
  • Odds slightly favor the EURUSD to re-test the July low after the pullback is over.

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