Market Overview: EURUSD Forex
The weekly chart formed a weekly EURUSD bull leg trading back into the trading range. The bulls hope to get follow-through buying to retest the top of the trading range (Aug/Sep highs). The bears hope that the middle of the trading range or the November 6 high will act as resistance.
EURUSD Forex market
The Weekly EURUSD chart
- This week’s candlestick on the weekly EURUSD Forex chart was a big bull bar closing in its upper half with a prominent tail above.
- Last week, we said that traders would see if the bears could create strong follow-through selling testing near the February 3 low area, or if the market would trade slightly lower but lack sustained follow-through selling instead.
- The market formed a big bull bar testing the middle of the trading range.
- The bulls see the whole move down (from Sept) as a sell vacuum and a bear leg within a trading range.
- They want a failed breakout (below the trading range) followed by a retest of the middle of the trading range (near the Nov 6 high area). The bulls got what they wanted.
- Next, they hope to get follow-through buying to retest the top of the trading range (Aug/Sep highs).
- If the market trades lower, they expect to get at least a small second leg sideways to up to retest the current leg extreme high (now Mar 7).
- The bears hope the market will stall around the middle of the trading range and form a lower high.
- They see the current move as a buy vacuum and a bull leg within the trading range.
- They hope that the middle of the trading range or the November 6 high will act as resistance.
- The market formed a big bull bar trading back into the trading range.
- The bull leg within the trading range is underway.
- The move is strong enough for traders to expect at least a small second leg sideways to up following a pullback.
- For now, traders will see if the bulls can create a follow-through bull bar.
- Or will the market lack follow-through buying instead?
- The middle of the trading range is an area of balance and a magnet.
The Daily EURUSD chart
- The EURUSD spike back up testing the middle of the trading range.
- Previously, we said that traders would see if the bulls could create a breakout above the January 27 high with sustained follow-through buying, or if the bears could create a bear leg to retest near the January 13 low area instead.
- The bulls want a failed breakout below the trading range. They got a reversal from a wedge pattern (Oct 23, Nov 22, and Jan 13), an embedded wedge (Dec 13, Jan 2, and Jan 13) and a higher low major trend reversal (Feb 3).
- They want a breakout above the January 27 high followed by a measured move based on the height of the 10-week trading range. They got it this week.
- They hope that the bull leg to retest the top of the trading range is now underway.
- If there is a pullback, the bulls expect at least a small second leg sideways to up to retest the current leg extreme high (now Mar 7).
- The bears could not create sustained follow-through selling following the breakout below the trading range.
- They see the current move as a buy vacuum and a bull leg within the trading range.
- They hope that the middle of the trading range or the November 6 high will act as resistance.
- They want the market to form a lower high.
- The bull leg within the trading range is currently underway.
- The move up is strong enough for traders to expect at least a small second leg sideways to up following a pullback.
- Traders will see if the bulls can continue to create more follow-through buying trading above the November 6 high.
- Or will the market stall around the current levels (middle of the trading range or the November 6 high area) instead?
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