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EURUSD Retest the Recent Low

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Market Overview: EURUSD Forex

The EURUSD retest the recent low (Nov 22) this week. The bears want a strong breakout and measured move based on the height of the trading range. The bulls want a reversal from a large double bottom bull flag (Oct 3 and Nov 22), a higher low major trend reversal and a small double bottom (Nov 22 and Dec 20).

EURUSD Forex market

The Weekly EURUSD chart

EURUSD Weekly - Retest Low, Double Bottom, Bears Want BO, EURUSD Retest the Recent Low
  • This week’s candlestick on the weekly EURUSD Forex chart was a follow-through bear bar closing slightly below the middle of its range with a long tail below.
  • Last week, we said that traders would see if the bulls could create another leg higher (a two-legged pullback) or if the bears could create a follow-through bear bar. The odds still slightly favor at least a small sideways to down leg after the pullback.
  • Previously, the bears got a strong bear leg breaking below the trading range low.
  • They expect to get (at least) a small sideways to down leg to retest the recent extreme low (Nov 22) after the pullback. They got it this week.
  • They want a strong breakout and measured move based on the height of the trading range.
  • They want another strong leg down completing the wedge pattern (the first two legs being Oct 23 and Nov 22).
  • They must continue to create follow-through selling to increase the odds of a breakout below the trading range.
  • The bulls see the move to the November 22 low as a sell vacuum and a bear leg within a trading range.
  • They want a failed breakout and the trading range low to act as support followed by a retest of the middle of the trading range (around the 20-week EMA).
  • They see this week as a retest of the prior leg’s extreme low.
  • They want a reversal from a large double bottom bull flag (Oct 3 and Nov 22), a higher low major trend reversal and a small double bottom (Nov 22 and Dec 20).
  • They must create consecutive bull bars closing near their highs to indicate that they are back in control.
  • Since this week’s candlestick is a bear bar closing in its lower half with a long tail below, it can be a sell signal bar albeit weaker (prominent tail below).
  • Traders will see if the bears can create a breakout below the November 22 low with follow-through selling.
  • Or will the market stall around the November 22 low area and trade higher instead?
  • Most breakouts from trading ranges fail and odds favor the trading range to continue.
  • The market is trading around the lower third of the trading range which can be the buy zone of trading range traders.
  • The EURUSD is in a 110-week trading range. (Trading range high: July 2023, low: October 2023). 
  • Traders will BLSH (Buy Low, Sell High) within a trading range until a breakout with follow-through selling/buying.

The Daily EURUSD chart

EURUSD Daily - Retest Low, Bears Want BO, Double Bottom
  • The EURUSD traded slightly higher on Tuesday but reversed into a bear bar. Wednesday formed a big bear bar testing near the November 22 low. There was no follow-through selling on Thursday and Friday.
  • Last week, we said because of the strong move down, the odds slightly favor at least a small sideways to down leg to retest the November 22 low after the pullback, even if it forms a higher low.
  • Previously, the bears got a strong bear leg breaking below the trading range low.
  • They saw the recent move as a breakout pullback. They wanted the 20-day EMA or the bear trend line to act as resistance.
  • They expect to get at least a small second leg sideways to down to retest the recent leg extreme low (Nov 22). They got what they wanted.
  • The bears want a breakout and a measured move down based on the height of the trading range.
  • They want the third led down completing the wedge pattern (with the first two legs being Oct 23 and Nov 22).
  • They see Thursday and Friday as a pullback and hope to get at least a small second leg sideways to down to retest the December 12 low.
  • They must create sustained follow-through selling to increase the odds of lower prices.
  • The bulls see the move down to the November 22 low as a sell vacuum and a bear leg testing the trading range low.
  • They want a failed breakout and hope that the trading range low will act as support.
  • They see the current move as a retest of the prior low (Nov 22).
  • They want reversal from a small double bottom (Nov 22 and Dec 12), a wedge pattern (Oct 23, Nov 22, and Dec 13) and a higher low major trend reversal.
  • They must create consecutive bull bars closing near their highs trading far above the 20-day EMA and the bear trend line to indicate they are back in control.
  • Wednesday was a big bear bar testing the November 22 low. The lack of follow-through selling indicates that the bears are not as strong as they hope to be.
  • For now, traders will see if the bears can create a retest and breakout below the November 22 low with follow-through selling.
  • Or will the market stall around the current levels and trade higher instead?
  • The low of the large trading range can be the buy zone of trading range traders.
  • Most breakouts from trading ranges fail and odds favor the trading range to continue.
  • Traders will continue to BLSH (Buy Low, Sell High) within a trading range until a breakout with follow-through selling/buying.

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