Market Overview: EURUSD Forex
Weekly EURUSD bears want a retest of the low (March 13), followed by a strong breakout. Bulls want a higher low relative to March 13, followed by a second leg sideways to up. The market remains within the 41-week trading range.
EURUSD Forex market
The Weekly EURUSD chart
- This week’s EURUSD candlestick was a bear bar closing near its low with a long upper tail.
- Last week, we said traders would watch whether sellers appear on the first pullback above the 6-bar bear microchannel, and whether the 20-week EMA acts as resistance, leading to a retest of the March 13 low. Or if bulls could form strong bull bars above the 20-week EMA in the weeks ahead.
- The market traded higher to retest near the 20-week EMA, where sellers emerged above the 6-bar bear microchannel.
- Bulls see the March 13 move as a sell vacuum test of the trading range low.
- They want the August low area to hold as support.
- Bulls see the market forming a two-bar reversal and a large double bottom bull flag (August 1 and March 13).
- Bulls view this week as a retest of the prior low and want a higher low relative to March 13, followed by a second leg sideways to up.
- Given the strength of the prior 6-bar bear microchannel, bulls are better off waiting for a High 2 setup if it forms.
- If the market breaks below the August 1 trading range low, bulls want the move to be brief with limited follow-through, resulting in a failed breakout.
- Bulls need consecutive strong bull bars to show they have regained control.
- Bears previously formed a 6-bar bear microchannel, indicating persistent selling pressure.
- They want sellers on the first pullback above the microchannel—so far, this is the case.
- Bears see this week as a pullback and want a second leg sideways to down to retest the March 13 low, followed by a strong breakout.
- Bears want a strong breakout below the 41-week trading range, with a measured move based on the trading range height, projecting toward the May 12 low.
- If the market trades higher, bears want the 20-week EMA and bear trendline to act as resistance.
- Bears need consecutive bear bars closing near their lows and a strong break below the August low to show decisive control.
- The market may have flipped into Always In Short.
- The market remains within the 41-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.
- The middle of the range remains a magnet—currently around the 20-week EMA.
- Traders will watch whether bears can retest the March 13 low and follow through with a strong breakout.
- Or will the market continue to stall near the trading range low, followed by a retest above the 20-week EMA in the weeks ahead instead.
The Daily EURUSD chart
- EURUSD traded lower on Monday but reversed into a large outside bull bar. There was no follow-through buying, and the market traded sideways to down for the rest of the week.
- Last week, we said traders would watch whether bears could create a strong retest and breakout below the August low, or whether the market would continue to stall near the trading range low, followed by strong buying above the 20-day EMA in the weeks ahead.
- The market tested the 20-day EMA several times but has not yet broken strongly above it.
- Previously, bears created a strong bear leg testing the trading range low (March 13).
- Bears see the recent move as forming a wedge bear flag (March 17, March 19, and March 23) and a double top bear flag (March 10 and March 23).
- They want at least a small sideways to down leg retesting the March 13 low. This move is underway.
- Bears want a strong breakout below the 41-week trading range, followed by a measured move based on the range height, projecting toward the May 12 low area.
- Bears want the 20-day EMA or the bear trendline to act as resistance.
- They need consecutive strong bear bars to increase the odds of a retest and breakout below the August low.
- Bulls want the August low to hold as support.
- They see the current move as a retest of the March 13 low and want a higher low major trend reversal or a double bottom.
- They want the retest to be weak—sideways overlapping candles, prominent tails below bars, and weak bear bars.
- Bulls need consecutive strong bull bars closing near their highs and trading above the 20-day EMA and bear trendline to show control.
- If the market breaks below the trading range, bulls want the move to be brief with limited follow-through, resulting in a failed breakout.
- The market may have flipped into Always In Short.
- EURUSD remains in a trading range. 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.
- Traders are watching the strength of the retest of the March 13 low—whether it is strong (consecutive bear bars closing near their lows) or weak (overlapping bars with prominent lower tails or dojis), potentially forming a higher low or a double bottom.
- If the move is strong, the odds of a breakout below the August low increase. If the move is weak, the odds of the market stalling around the trading range low area followed by a retest above the 20-day EMA in the weeks ahead will increase.
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