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Bears Want Follow-through Selling in EURUSD

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Market Overview: EURUSD Forex

Bears want follow-through selling in EURUSD below the 20-week EMA to increase the odds of a test of the trading range low. If the market trades lower, bulls want the lower third of the trading range to provide support.

EURUSD Forex market

The Weekly EURUSD chart

EURUSD Weekly - Bears Want Retest TR Low, Need FT Selling, Bears Want Follow-through Selling in EURUSD
  • This week formed a bear bar closing near its low and below the 20-week EMA.
  • Last week, we said traders would watch whether bears could create bear bars breaking below the 20-week EMA or whether the move would continue to stall around it.
  • Bulls view the current move as a pullback forming a double bottom bull flag (April 30 and May 15).
  • They hope the move will remain 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.
  • They need consecutive bull bars closing near their highs to increase the odds of trend resumption.
  • Bears see the April 17 move as a bull leg within a trading range and a retest of the January 27 high.
  • They want a reversal from a lower high major trend reversal and a head and shoulders top (September 17, January 27, April 17), followed by 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.
  • The market has traded around the middle of the trading range (near the 20-week EMA) over the past few weeks.
  • 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 bear bars below the 20-week EMA.
  • Or whether the move remains weak and sideways, closing with a long lower tail or a bull body.
  • Price remains within the 49-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 Daily - Bears Need FT Selling to Retest the Low
  • EURUSD traded down this week, closing below the 20-day EMA and the April 30 low.
  • Last week, we said traders were watching whether bulls could create a strong second leg sideways to up breaking above the prior leg high (April 17), or whether bears would generate strong bear bars breaking far below the 20-day EMA.
  • Bears want a reversal from a double top bear flag (February 23 and April 17) and a lower high major trend reversal.
  • They view the recent move as a second leg sideways to up retesting the prior high (April 17), forming a wedge bear flag (April 27, May 1, and May 6) and a smaller lower high major trend reversal.
  • If the market trades higher, bears want the 20-day EMA or the May 6 high to act as resistance, forming another lower high.
  • Bears want a retest of the trading range low (March 13), followed by a breakout below.
  • Bulls view the current move as a pullback forming a double bottom bull flag (April 30 and May 15).
  • Bulls want the March 23 high 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 traded around the middle of the range (near the 20-day EMA), forming a lower high (April 17), followed by a leg down this week.
  • Traders are watching whether bears can create strong follow-through selling to test near the trading range low.
  • Or will the market trade slightly lower but stall around the lower third of the trading range instead?
  • The middle of the range is an area of balance and often acts as a magnet.
  • 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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