Market Overview: EURUSD Forex
The weekly EURUSD bulls want a higher low and a large double bottom pullback (April 6 and June 8). If the market trades higher, bears want the 20-week EMA or the May 29 high to act as resistance, forming a double top bear flag.
EURUSD Forex market
The Weekly EURUSD chart
- This week formed a bull bar closing in its upper half with a small tail above, after trading slightly below last week’s low.
- Last week, we said traders would watch whether bears could generate strong follow-through selling to increase the odds of a test and breakout below the trading range low, or whether the market would trade slightly lower but lack follow-through, closing with long lower tails or bull bodies.
- Bulls view the current move as a pullback forming a wedge bull flag (April 30, May 21, and June 8).
- They want the move to form a higher low, creating a large double bottom pullback (April 6 and June 8).
- Bulls want the lower third of the trading range, or the March 13 low area, to provide support.
- Bulls need to create a strong bull entry bar triggering the High 3 buy setup, followed by sustained buying, to increase the odds of a test of the trading range high.
- Bulls need consecutive strong bull bars breaking decisively above the 20-week EMA and the wedge bull flag to demonstrate control.
- Bears want a reversal from a lower high major trend reversal (April 17) and a head and shoulders top (September 17, January 27, and April 17).
- Bears want a retest and breakout below the trading range low, followed by a measured move based on the height of the trading range.
- Bears see this week as a pullback and hope for a retest of the June 8 low.
- If the market trades higher, bears want the 20-week EMA or the May 29 high to act as resistance, forming a double top bear flag.
- Bears need to create strong follow-through selling to increase the odds of reaching the trading range low.
- The market traded slightly lower this week, but there was no follow-through selling.
- The middle of the range (currently around the 20-week EMA) is an area of balance and often acts as a magnet.
- Traders will watch whether bulls can generate a strong bull entry bar with sustained follow-through buying over the next several weeks, breaking above the 20-week EMA.
- Or whether the market remains within the bear channel that began from the April 17 high and retests the June 8 low.
- Price remains within the 54-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 opened slightly lower on Monday, but there was no follow-through selling. On Thursday, the market retested the June 8 low and reversed into an outside bull bar.
- Last week, we said traders would watch whether bears could create strong follow-through selling to test the trading range low, or whether the market would trade slightly lower but lack follow-through, forming overlapping candlesticks and bull bars with prominent lower tails.
- Bears want a reversal from a lower high major trend reversal (April 17) and a double top bear flag (February 23 and April 17).
- Bears want a retest of the trading range low (March 13), followed by a breakout and a measured move based on the height of the trading range.
- Bears see this week as a two-legged pullback testing the 20-day EMA.
- They want a retest of the June 8 low and a resumption of the bear leg.
- Bears want the 20-day EMA or the May 29 high to act as resistance, forming another lower high and a double top bear flag.
- Bears need to create consecutive bear bars closing near their lows to increase the odds of reaching the trading range low.
- Bulls view the current move as a pullback forming a wedge bull flag (April 30, May 21, and June 8) and a large double bottom bull flag (April 6 and June 8).
- Bulls want the move to have poor follow-through, forming long lower tails and bull bodies.
- Bulls want the April 6 low or the trading range low to hold as support.
- Bulls need consecutive bull bars closing near their highs and breaking above the 20-day EMA and the wedge bull flag to increase the odds of a test of the top of the trading range.
- The market tested the lower third of the trading range (June 8), but follow-through selling has been limited so far.
- Traders will watch whether bulls can create strong follow-through buying and break decisively above the 20-day EMA and the bear trend line, or whether the market stalls there and retests the June 8 low 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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