Market Overview: EURUSD Forex
The market is forming a potential weekly EURUSD failed failure. In this case, the reversal of the failed breakout below the ii pattern fails, resuming the original bear breakout. Bears need strong follow-through selling while bulls want the low of the trading range to act as support.
EURUSD Forex market
The Weekly EURUSD chart
- This week formed a bear bar closing near its low.
- Last week, we said traders would watch whether bulls could create follow-through buying over the next few weeks to test the 20-week EMA, or whether the market would instead form a failed failure and retest the June 24 low.
- Bulls view the current move as a bear leg within the trading range, forming a large wedge bull flag (November 5, March 13, and June 24).
- Bulls want the low of the trading range to act as support.
- If the market trades lower, bulls want the June 24 low to act as support, forming a failed breakout and a lower low major trend reversal.
- Bulls need to create consecutive strong bull bars to show control.
- Bears want a reversal from a head and shoulders top (September 17, January 27, and April 17), followed by a measured move based on the height of the trading range.
- Bears view the recent move as a pullback forming a double top bear flag (July 2 and July 15).
- Bears want a strong retest and breakout below the June 24 low.
- If the market trades higher, bears want the July 15 high to act as resistance, forming a wedge bear flag.
- Bears need consecutive strong bear bars breaking decisively below the March 13 low, with follow-through selling, to increase the odds of a successful breakout and measured move.
- The market is forming a potential failed failure. In this case, the reversal of the failed breakout below the ii pattern fails, resuming the original bear breakout.
- A failed failure is a second signal, and second signals have a higher probability than first signals.
- For now, the market could still trade at least a little lower to test the June 24 low.
- Traders will watch whether bears can create follow-through selling below the June 24 low, or whether the market trades slightly lower but stalls around that area instead.
- 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.
- Markets have inertia and tend to continue doing what they have been doing. About 80% of breakout attempts fail.
The Daily EURUSD chart
- EURUSD traded sideways to down for the week. Thursday traded higher to test the 20-day EMA but reversed into an outside bear bar. Friday was an inside bear doji closing near its low.
- Last week, we said traders would watch whether bears could retest the June 24 low, followed by a strong breakout below the trading range, or whether the market would instead stall around the trading range low or the June 24 low.
- Bears view the recent move as a pullback forming a wedge bear flag (June 26, July 2, and July 15) and a double top bear flag (July 2 and July 15).
- Bears want a retest of the June 24 low, followed by a strong breakout and a measured move based on the height of the trading range.
- Bears want the 20-day EMA or the bear trend line to act as resistance.
- If the market trades higher, bears want the July 15 high to act as resistance, forming a larger double top bear flag.
- Bears need consecutive bear bars closing near their lows and breaking decisively below the low of the trading range to increase the odds of a successful breakout.
- Bulls view the current move as a retest of the June 24 low.
- Bulls want the move to be weak and sideways, with overlapping candlesticks and prominent lower tails, and want the low of the trading range to hold as support.
- Bulls want a reversal from a large wedge bull flag (November 5, March 13, and June 24).
- Bulls hope the July 1 low can act as support, forming a higher low double bottom bull flag.
- If the market trades lower, bulls want a failed breakout below the trading range, forming a double bottom with the June 24 low or a lower low major trend reversal.
- Bulls need consecutive strong bull bars closing near their highs to demonstrate control.
- The market is retesting the June 24 low following the recent pullback that tested the 20-day EMA.
- Traders will watch whether bears can create strong follow-through selling below the June 24 low, or whether the market stalls around that area instead.
- If the retest of the June 24 low is weak and remains sideways for a couple of weeks rather than breaking decisively lower, the odds of a move higher will increase.
- For now, the market could still trade at least a little lower.
- Markets have inertia and tend to continue doing what they have been doing. About 80% of breakout attempts fail.
- 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.
Market analysis reports archive
You can access all weekend reports on the Market Analysis page.
