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No Breakout Below the EURUSD August low

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Market Overview: EURUSD Forex

There was no breakout below the EURUSD August low this week. Bulls see the market forming a two-bar reversal and a large double bottom bull flag (August 1 and March 13). Bears see this week as a pullback and want a retest of the March 13 low, followed by a strong breakout.

EURUSD Forex market

The Weekly EURUSD chart

EURUSD Weekly - No Breakout Below the August Low, No Breakout Below the EURUSD August low
  • This week’s EURUSD candlestick is an inside bull bar closing in its upper half, with a small tail above.
  • Last week, we said traders would watch whether bears could create a strong breakout with sustained follow-through below the August low, or if any breakout attempt would stall near the trading range low.
  • So far, there is no breakout below the August low, and the market remains in the trading range.
  • Bulls see the recent move (March 13) as a sell vacuum test of the trading range low.
  • They want the August low area to hold as support.
  • Bulls see the market forming a two-bar reversal and a large double bottom bull flag (August 1 and March 13).
  • Bulls need consecutive strong bull bars to show they have regained control.
  • If the market retests the recent low, they want a higher low relative to March 13 low.
  • If the market breaks below the trading range low, bulls want the move to be brief and lack follow-through, resulting in a failed breakout.
  • Bears got a reversal from a wedge top (July 1, September 17, and January 27) and a trend channel line overshoot (January 27).
  • The bear leg consists of a 6-bar bear microchannel, indicating persistent selling.
  • There could be sellers on the first pullback above the bear microchannel.
  • Bears see this week as a pullback and want a retest of the March 13 low, followed by a strong breakout.
  • Bears want a strong breakout below the 40-week trading range, followed by a measured move based on the height of the range, projecting to the May 12 low area.
  • If the market trades higher, bears want the 20-week EMA to act as resistance, forming a lower high followed by a second leg sideways to down.
  • Bears need consecutive bear bars closing near their lows and breaking strongly below the August low to show control.
  • The market may have flipped into Always In Short.
  • Price remains within the 40-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.
  • The middle of the trading range can be an area of balance and a magnet — currently around the 20-week EMA.
  • Traders will watch whether there are sellers on the first pullback above the 6-bar bear microchannel and whether the 20-week EMA acts as resistance, followed by a retest of the March 13 leg low.
  • Or will bulls instead create strong bull bars above the 20-week EMA in the weeks ahead?

The Daily EURUSD chart

EURUSD Daily - Pullback to 20-Day EMA, Trading Range
  • EURUSD formed a two-legged sideways to up pullback, retesting the 20-day EMA this week.
  • Last week, we said traders would watch whether bears could generate a strong breakout with sustained follow-through below the August low, or if a break below would stall and lead to a retest of the 20-day EMA.
  • This week, there was no follow-through selling breaking below the August low.
  • Bears created a strong bear leg testing the trading range low.
  • The leg had relatively small pullbacks and formed a tight bear channel, indicating persistent selling.
  • Bears see the current move as a pullback and want at least a small sideways to down leg retesting the March 13 low.
  • Bears want a strong breakout below the 40-week trading range, followed by a measured move based on the range height, projecting to the May 12 low area.
  • Bears want the 20-day EMA or the March 10 high to act as resistance, forming a lower high and a double top bear flag (March 10 and March 19).
  • Bulls want the August low to hold as support.
  • They see the recent move as a sell vacuum test of the trading range low.
  • Bulls see three consecutive sell climaxes (February 2, March 3, and March 13) and expected at least a two-legged sideways to up pullback to the 20-day EMA, which occurred this week.
  • Bulls see the market forming a large double bottom bull flag (August 1 and March 13) and want a retest of the trading range high.
  • Bulls need consecutive strong bull bars closing near their highs and trading above the 20-day EMA and the bear trend line to show control.
  • If the market retests the March 13 low, bulls want a higher low.
  • If the market breaks below the trading range, bulls want the move to be brief and lack follow-through, resulting in a failed breakout.
  • The market may have flipped into Always In Short.
  • 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.
  • Traders are watching the strength of the current pullback—whether it is strong (consecutive bull bars closing near their highs and breaking clearly above the 20-day EMA and trend line) or weak (overlapping bars with prominent upper tails, stalling below the March 10 high or around the 20-day EMA).
  • For now, traders will watch whether bears can create a strong retest and breakout below the August low, or whether the market continues to stall near the trading range low, followed by strong buying above the 20-day EMA in the weeks ahead.

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