Market Overview: EURUSD Forex
The EURUSD bears need strong follow-through selling below the 20-week EMA. Bears want a retest and breakout below the trading range low. Bulls view the current move as a pullback forming a double bottom bull flag (April 30 and May 21).
EURUSD Forex market
The Weekly EURUSD chart
- This week formed a bear doji, closing below the middle of its range.
- Last week, we said traders would watch whether bears could create strong follow-through bear bars below the 20-week EMA or whether the move would remain weak and sideways, closing with a long lower tail or a bull body.
- Bulls view the current move as a pullback forming a double bottom bull flag (April 30 and May 21).
- They hope the move remains weak, with overlapping candlesticks and prominent lower tails.
- Bulls want a second leg sideways to up to retest the trading range high.
- They want the 20-week EMA or the March 23 high to act as support.
- If the market trades lower, bulls want the lower third of the trading range to provide support.
- Bulls need consecutive bull bars closing near their highs to increase the odds of trend resumption.
- Bears want a reversal from a lower high major trend reversal and a head and shoulders top (September 17, January 27, and April 17).
- Bears want a retest and breakout below the trading range low.
- Bears need follow-through selling below the 20-week EMA to increase the odds of a test of the trading range low.
- If the market trades higher, bears want the April 17 high to act as resistance, forming a double top bear flag.
- The market has traded around the middle of the trading range, near the 20-week EMA, in recent weeks.
- The middle of the range is an area of balance and often acts as a magnet.
- Traders will watch whether bears can generate strong follow-through selling below the 20-week EMA over the next few weeks or whether the move remains weak and sideways, closing with long lower tails or bull bodies.
- Price remains within the 50-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 Daily EURUSD chart
- EURUSD traded sideways to down this week, with overlapping candlesticks.
- Last week, we said traders would watch whether bears could create strong follow-through selling to test near the trading range low or whether the market would trade slightly lower but stall around the lower third of the trading range.
- Bears want a reversal from a double top bear flag (February 23 and April 17) and a lower high major trend reversal.
- Bears want a retest of the trading range low (March 13), followed by a breakout below.
- Bears need to create consecutive bear bars closing near their lows to show decisive control.
- If the market trades higher, bears want the 20-day EMA or the May 6 high to act as resistance, forming another lower high.
- Bulls view the current move as a pullback forming a double bottom bull flag (April 30 and May 21).
- Bulls want the March 23 high or the April 6 low area to act as support.
- If the market trades lower, bulls want the lower third of the trading range to act as support.
- Bulls need consecutive bull bars closing near their highs and trading above the 20-day EMA to increase the odds of a test of the trading range high.
- The market is currently trading slightly below the middle of the range, around the 20-day EMA.
- The middle of the range is an area of balance and often acts as a magnet.
- Traders will watch whether bears can create strong follow-through selling to test near the trading range low or whether the move stalls around the lower third of the trading range, followed by another leg up above the 20-day EMA.
- 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.
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