Market Overview: EURUSD Forex
The EURUSD bulls want a strong breakout above with sustained follow-through buying followed by a trend resumption. Bears want the December 24 or September 17 highs to act as resistance. If the market trades higher, they hope follow-through buying will be weak, resulting in a failed breakout above the September 17 high.
EURUSD Forex market
The Weekly EURUSD chart
- This week’s EURUSD candlestick was a big outside bull bar closing near its high and above the December 24 high.
- Last week, we said traders would watch whether bears could generate follow-through selling below the 20-week EMA or whether the pullback would stall around it.
- Bulls see the January 20 move as a pullback within the larger bull trend.
- They want a reversal from a wedge bull flag (August 1, November 5, January 19).
- Bulls want the 20-week EMA to act as support, followed by at least a small sideways-to-up leg to retest the December 24 high. So far, this is happening.
- Bulls need a strong breakout with sustained follow-through buying above the September 17 high to increase the odds of a trend resumption.
- Bears want the upper third of the multi-year trading range to act as resistance, maintaining a lower high relative to the January 2021 high, which remains the case so far.
- They created a pullback to the 20-week EMA (January 19) but failed to get follow-through selling below it.
- Bears see the current move as a buy vacuum test of the trading range high.
- Bears want the December 24 or September 17 highs to act as resistance.
- If the market trades higher, they hope follow-through buying will be weak, resulting in a failed breakout above the September 17 high.
- Bears need strong consecutive bear bars breaking well below the 20-week EMA to demonstrate control.
- The market has been in a 32-week trading range.
- Until there is a clear breakout with strong follow-through, traders may continue to Buy Low, Sell High (BLSH), buying near the lower third and selling near the upper third of the range.
- Buying pressure within the trading range has been slightly stronger, with pullbacks forming higher lows, compared to the selling pressure.
- The pullback from June 2025 to January 2026 is about one-fourth the height of the rally from January 2025 to June 2026, consistent with a minor pullback consolidation within a larger trend.
- Odds slightly favor the market trading at least a little higher to retest the September 17 high.
- Traders will watch whether bulls can generate follow-through buying above the September 17 high.
- Or whether the market stalls below the September 17 high instead.
The Daily EURUSD chart
- EURUSD spiked higher this week and closed above the December 24 high.
- Last week, we said traders would watch whether bears could get follow-through selling toward the November 5 low or whether bulls would produce consecutive strong bull bars reversing well above the 20-day EMA.
- Bears got a pullback to test the November 5 low, forming a higher low (January 19).
- Bears see the current move as a retest of the December 24 high and want the December 24 or September 17 highs to act as resistance.
- If the market trades higher, bears hope follow-through buying above the September 17 high will be weak, resulting in a failed breakout.
- Bears need strong consecutive bear bars closing near their lows and breaking far below the November 5 low to show control.
- Bulls see the recent move as forming a higher low (Januand a large wedge bull flag (August 1, November 5, January 19).
- They want a strong retest and breakout above the September 17 high, followed by a resumption of the bull trend.
- Bulls need strong follow-through buying over the next several weeks to increase the odds of trend resumption.
- If the market trades lower, bulls want the 20-day EMA to act as support.
- EURUSD has been in a trading range for more than half a year.
- Until there is a strong breakout with sustained follow-through, traders may continue to Buy Low, Sell High (BLSH), buying near the lower third and selling near the upper third of the range.
- Buying pressure within the trading range has been slightly stronger, with pullbacks forming higher lows, compared to the selling pressure.
- The pullback from June 2025 to January 2026 is about one-fourth the height of the rally from January 2025 to June 2026, consistent with a minor pullback consolidation within a larger trend.
- For now, odds slightly favor a retest of the September 17 high area.
- Traders will watch whether bulls can create a strong retest and breakout above the September 17 high with sustained follow-through buying.
- Or whether the market stalls around the September 17 area, forming a double top instead.
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