Market Overview: EURUSD Forex
The EURUSD bulls want a trend resumption to form the larger wedge pattern, with the first two legs being April 21 and July 1 highs. If the market trades higher, the bears want it to form a double top with the July 1 high.
EURUSD Forex market
The Weekly EURUSD chart
- This week’s candlestick on the weekly EURUSD Forex chart was an outside bull doji with a long tail below.
- Last week, we said the pullback (Aug 1) appears to be minor. Traders would see if the bulls could create more follow-through buying, or if the market would continue to stall below the July 24 high, followed by bear bars instead.
- The market traded below the prior week’s low but reversed to close in its upper half on Friday.
- The bears see the recent move (Jul 1) as a bull leg and a buy vacuum test of the multi-year trading range high. They want the move to form a lower high (vs Jan 2021).
- They want the upper third of the multi-year trading range, or the May 2021 high, to act as a resistance area.
- They want a TBTL (Ten Bars, Two Legs) pullback lasting a few weeks.
- They want another leg down to form the wedge pattern (with the first two legs being Jul 17 and Aug 1 lows) from a double top bear flag (Jul 24 and Aug 22).
- If the market trades higher, they want it to form a double top with the July 1 high.
- They need to create strong bear bars to show they are back in control.
- Previously, the bulls got a strong move in a tight bull channel.
- They want another leg up to form the larger wedge pattern, with the first two legs being April 21 and July 1 highs.
- They want a measured move (based on the height of the trading range), which will take the market to the 2021 high area.
- They see the recent move (Aug 1) as a two-legged pullback and hope that it has alleviated the recent overbought condition.
- They want a retest and breakout above the July 1 high, followed by a resumption of the trend from a double bottom bull flag (Jul 17 and Aug 1) and a 20-gap bar buy setup.
- They want the 20-week EMA and the bull trend line to act as supports.
- The bulls need to create more follow-through buying to increase the odds of a resumption of the move.
- So far, the move up (Jul 1) was in a tight bull channel, which means strong bulls.
- The recent pullback (Aug 1) has overlapping candlesticks, bull bars, and prominent tails below candlesticks. This week, the market traded below the prior week’s low, but there was no follow-through selling.
- The bears are not yet as strong as they had hoped.
- Traders will see if the bulls can create more follow-through buying, followed by a breakout above the July 1 high.
- If the pullback (Aug 1) remains weak (sideways with overlapping ranges, bull bars, prominent tails below candlesticks) and holding above the 20-week EMA, the odds of a retest and breakout above the July 1 high will increase soon.
- Or will the market continue to stall below the July 24 high, followed by bear bars instead?
- For now, the pullback (Aug 1) appears to be minor.
The Daily EURUSD chart
- The market traded lower, closing below the 20-day EMA. Friday traded slightly lower but reversed into a big outside bull bar, closing near its high.
- Last week, we said the pullback (Aug 1) may only be minor. Traders would see if the bulls could create more follow-through buying to retest the July 1 high, or if the market would stall below the July 24 high, followed by a third leg sideways to down instead.
- The bears got a two-legged pullback (Aug 1) following the large wedge pattern (Mar 18, Apr 21, and Jul 1) and embedded wedge (May 26, Jun 12, and Jul 1).
- They want another leg down from a wedge bear flag (Aug 1, Aug 7, and Aug 13) and a larger double top bear flag (Jul 24 and Aug 13), but the follow-through selling (Aug 22) has been limited.
- If the market trades higher, they want the July 24 or July 1 highs to act as resistance areas.
- They must create strong consecutive bear bars trading far below the 20-day EMA and the bear trend line to show they are back in control.
- The bulls want a measured move (based on the height of the trading range), which will take the market to the 2021 high area.
- They see the recent move (Aug 1) as a two-legged pullback and hope that it has alleviated the prior overbought condition.
- They want another leg up to form the larger wedge pattern, with the first two legs being April 21 and July 1 highs.
- The next target for the bulls is the July 1 high, followed by a breakout and a resumption of the trend.
- They want the 20-day EMA to act as support.
- The prior move (Jul 1) was strong (in a tight bull channel), which means strong bulls.
- The recent pullback (Aug 1) appears relatively weaker compared to the prior leg up (May 12 to Jul 1).
- The sideways to down move this week (Aug 22) also lacked follow-through selling below the 20-day EMA.
- For now, the pullback (Aug 1) may only be minor.
- The bulls need to create strong consecutive bull bars to increase the odds of another leg up.
- Traders will see if the bulls can create more follow-through buying to retest and break above the July 1 high.
- Or will the market continue to stall below the July 24 high, followed by a third leg sideways to down in the weeks ahead instead?
Market analysis reports archive
You can access all weekend reports on the Market Analysis page.
