Market Overview: EURUSD Forex
The market formed a weekly EURUSD 6-bar bull microchannel indicating persistent buying. There could be buyers below the first pullback. Bulls need a strong retest and breakout above the September 17 high to resume the bull trend. Bears need strong consecutive bear bars breaking well below the 20-week EMA to demonstrate control.
EURUSD Forex market
The Weekly EURUSD chart
- This week’s EURUSD candlestick was a bull bar closing in its upper half with a prominent tail above.
- Last week, we noted traders were watching whether bears could produce follow-through selling toward the 20-week EMA, or whether buyers would step in below the 5-bar bull microchannel.
- So far, bears have been unable to create follow-through selling.
- Bulls produced a retest of the recent trend extreme high (September 17), forming a lower high on December 24.
- They view the November 5 selloff as a pullback within a broader bull trend, forming a double bottom bull flag (August 1 and November 5).
- The rally from the November 21 low formed a 6-bar bull microchannel, indicating persistent buying; buyers may appear below its first pullback.
- If the market trades lower, bulls want the 20-week EMA to act as support, followed by at least a small sideways-to-up leg to retest the December 26 high.
- Bulls need a strong retest and breakout above the September 17 high to resume the bull trend.
- Bears want the upper third of the multi-year trading range to act as resistance, maintaining a lower high relative to the January 2021 high, which remains the case so far.
- The November 5 selloff had overlapping bars, indicating bears are not yet decisively strong.
- Bears view the current move (Dec 26) as a retest of the prior trend extreme high and want it to stall below the September 17 high to form a lower high major trend reversal.
- Bears need strong consecutive bear bars breaking well below the 20-week EMA to demonstrate control.
- The market has been in a 28-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 market is currently trading slightly above the middle of the range, which can act as an area of balance and a magnet.
- Traders will watch whether bulls can produce further follow-through buying toward the September 17 high, or whether the market stalls at current levels and retests the 20-week EMA.
- There could be buyers below the first pullback from the 6-bar bull microchannel.
- For now, the market remains in a sideways-to-up phase.
The Daily EURUSD chart
- EURUSD traded higher early in the week, testing the December 16 high, followed by a small pullback.
- Last week, we noted traders were watching whether bears could produce follow-through selling below the 20-day EMA, or whether the pullback would remain weak, stall around the 20-day EMA, and lead to another sideways-to-up leg.
- Bears view the current rally as a retest of the prior trend extreme high and want it to stall below the September 17 high, forming a lower high major trend reversal.
- They want the October 1 high to act as resistance, forming a double top bear flag (October 1 and December 24), followed by a sideways-to-down leg to retest the August 1 low.
- Bears need strong consecutive bear bars closing near their lows and trading well below the 20-day EMA and the bull trend line to show they are back in control.
- Bulls got a reversal from a large double bottom bull flag (August 1 and November 5) and a wedge bull flag (September 25, October 9, November 5).
- They want a strong retest and breakout above the September 17 high to resume the bull trend.
- They created the third push up this week (December 24), with the first two pushes on December 4 and December 16.
- Bulls want a persistent small pullback in a tight bull channel to retest the September 17 high.
- If the market trades lower, they want the 20-day EMA and the bull trend line to hold as support.
- Bulls need strong consecutive bull bars to increase the odds of a breakout above the September 17 high.
- EURUSD has been in a 142-day 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.
- The market is currently trading slightly above the middle of the range, which can act as an area of balance and a price magnet.
- Traders will watch whether bulls can produce further follow-through buying breaking above the October 1 high, or whether bears can create strong bear bars trading below the 20-day EMA.
- For now, buying pressure (consecutive bull bars) remains slightly stronger than selling pressure (weak sideways pullback).
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