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Monthly EURUSD IOI Pattern

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Market Overview: EURUSD Forex

The market formed a monthly EURUSD ioi pattern. Bulls want an upside breakout; bears want a downside breakout with sustained follow-through. Traders will watch which direction the market breaks out and whether follow-through develops.

EURUSD Forex market

The Monthly EURUSD Forex chart

EURUSD Monthly - Wedge Top, IOI Pattern, Monthly EURUSD IOI Pattern
  • February formed a small inside bear doji, closing near the middle of its range.
  • Last month, we said traders would watch whether bulls could produce follow-through buying above the September 17 high and the bear trend line, or whether the market would stall and pull back to test the January or November lows.
  • The market traded sideways near the middle of January’s range, forming an ioi (inside–outside–inside) pattern.
  • Bulls broke above the September 17 high (January 27), but the long upper tail signals weak follow-through and lack of decisive strength.
  • Bulls see the November 5 selloff as a pullback within a broader bull trend and want a trend resumption from either a double bottom bull flag (August 1 and November 5) or a wedge bull flag (August 1, November 5, January 19).
  • They need strong follow-through buying well above the September 17 high and the bear trend line to increase the probability of a sustained bull trend.
  • If the market trades lower, bulls want a higher low relative to November 5, forming a third leg in a developing wedge bull flag.
  • Bears view the January 27 rally as a retest of the September 17 high and the bear trend line.
  • They want the rally to form a major lower high relative to the January 2021 high, which remains intact.
  • Bears view the entire move from the January 2025 low to the January 2026 high as a spike and channel.
  • They want a reversal from a wedge top (July 1, September 17, January 27) and a trend channel line overshoot (January 27).
  • Bears want a deep pullback retesting the start of the channel (May 12), ending the spike and channel phase and transitioning into a trading range.
  • Bears need consecutive strong bear bars to shift the market into Always In Short.
  • If the market trades higher, bears want the January 27 high or bear trend line to act as resistance.
  • The market is testing potential resistance near the bear trend line and the upper third of the multi-year trading range, where trading range sellers may emerge.
  • February’s candlestick traded around the middle of January’s range — a big one-bar trading range — indicating a temporary balance between bulls and bears.
  • The last nine candlesticks have mostly overlapping ranges, showing active two-sided participation within the trading range.
  • The market formed an ioi (inside-outside-inside) pattern. Bulls want an upside breakout; bears want a downside breakout with sustained follow-through.
  • Traders will watch which direction the market breaks out and whether follow-through develops.
  • Until a decisive breakout occurs, traders may continue Buy Low, Sell High (BLSH), buying near the lower third and selling near the upper third of the trading range.
  • The recent Middle East war escalation may increase volatility.

The Weekly EURUSD chart

EURUSD Weekly - Bears Need FT Selling, Bulls Want HL
  • This week formed a small inside bull doji, closing near its high.
  • Last week, we said traders would watch whether bears could generate follow-through selling to test the 20-week EMA, or whether the market would stall around the December 24 high or the 20-week EMA, forming a higher low instead.
  • So far, price is trading sideways around the December 24 high.
  • Bulls previously broke above the September 17 high (January 27) but failed to produce sustained follow-through.
  • Bulls see the current move as a two-legged pullback forming a double bottom bull flag (February 6 and February 19).
  • They want the pullback to remain weak and sideways, with overlapping bars, long tails below, and bull bars—so far, this appears to be the case.
  • Bulls want the December 24 high or the 20-week EMA to hold as support, followed by a retest of the January 27 high and a sustained breakout above it.
  • They are looking for a measured move toward the 2021 high, based on the height of the 7-month trading range.
  • Bulls need consecutive strong bull bars closing above the September 17 high and the bear trend line (not shown; drawn across the February 2018 and January 2021 highs) to increase the probability of trend resumption.
  • Bears want the breakout above the September 17 high to fail, leading to a two-legged sideways-to-down pullback.
  • So far, the pullback remains mostly sideways around the December 24 high area.
  • Bears want a retest of the January low.
  • They need consecutive strong bear bars trading well below the 20-week EMA to shift the market to Always In Short.
  • If price trades higher, bears want the February 11 high to act as resistance, forming a double top bear flag.
  • The market broke above the 37-week trading range (January 27) but failed and reversed back into it.
  • Price remains within the 37-week range. Until there is a clear breakout with strong follow-through, traders may continue Buy Low, Sell High (BLSH), buying near the lower third and selling near the upper third.
  • Traders will watch whether bears can generate follow-through selling to test the 20-week EMA, or whether the market stalls around the December 24 high or the 20-week EMA, forming a higher low and setting up a retest higher in the weeks ahead.
  • The recent Middle East war escalation may increase volatility.

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