Market Overview: EURUSD Forex
The bears want a EURUSD breakout below the trading range, followed by a measured move based on the height of the trading range. Bulls want a reversal from a large double bottom bull flag (March 13 and June 19) and a trend channel line overshoot.
EURUSD Forex market
The Weekly EURUSD chart
- This week formed an outside bear bar closing in its lower half with a prominent tail below.
- Last week, we said traders would watch whether bulls could generate a strong bull entry bar with sustained follow-through buying, or whether the market would remain within the bear channel that began from the April 17 high and retest the June 8 low.
- Bulls view the current move as a pullback forming a wedge bull flag (May 21, June 8, and June 19) and a trend channel line overshoot.
- They want a reversal from a large double bottom bull flag (March 13 and June 19).
- Bulls want the bottom of the trading range (March 13) to hold as support.
- Bulls need consecutive strong bull bars breaking decisively above the 20-week EMA and the wedge bull flag to demonstrate control.
- Bears want a reversal from a lower high major trend reversal (April 17) and a head and shoulders top (September 17, January 27, and April 17).
- Bears want a breakout below the trading range low (March 13), followed by a measured move based on the height of the trading range.
- Bears need consecutive strong bear bars breaking decisively below the March 13 low, with follow-through selling, to increase the odds of a reversal.
- If the market trades higher, bears want the 20-week EMA or the June 15 high to act as resistance, forming a double top bear flag.
- The market tested near the 20-week EMA early in the week but reversed lower to retest the bottom of the trading range.
- Traders will watch whether bears can generate follow-through selling over the next several weeks and break below the March 13 low.
- Or will buyers step in again near the bottom of the trading range?
- Price remains within the 55-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.
- The middle of the range is an area of balance and often acts as a magnet.
The Daily EURUSD chart
- EURUSD traded slightly higher early in the week, testing the 20-day EMA, but reversed lower from Wednesday onward. Friday traded lower before reversing to form a bull reversal bar.
- Last week, we said traders would watch whether bulls could generate strong follow-through buying and break decisively above the 20-day EMA and the bear trend line, or whether the market would stall there and retest the June 8 low instead.
- Bears created a bear leg from a lower high major trend reversal (April 17) and a double top bear flag (February 23 and April 17), testing the bottom of the trading range.
- Bears want a breakout below the trading range low (March 13), followed by a measured move based on the height of the range.
- If the market trades higher, bears want the 20-day EMA or the June 15 high to act as resistance, forming another lower high and a large Low 4 sell setup.
- Bears need to create consecutive bear bars closing near their lows to increase the odds of a successful breakout below the trading range.
- Bulls view the current move as a bear leg forming a wedge bull flag (May 21, June 8, and June 19) and a large double bottom bull flag (March 13 and June 19).
- Bulls hope to get a reversal from a trend channel line overshoot.
- Bulls want the trading range low to hold as support.
- Bulls need to create a strong bull entry bar with sustained follow-through buying, breaking decisively above the 20-day EMA and the bear trend line to increase the odds of a move higher.
- The market formed another leg down to test the trading range low.
- Friday formed a bull reversal bar following a trend channel line overshoot.
- Traders will watch whether bulls can create a strong bull entry bar early next week, with sustained buying, and test above the 20-day EMA.
- Or will bears be able to generate follow-through selling and break below the March 13 low instead?
- 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.
- The middle of the range is an area of balance and often acts as a magnet.
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