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Strong EURUSD Breakout

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Market Overview: EURUSD Forex

The bulls got a strong EURUSD breakout above the trading range in June. They want a strong breakout and a measured move based on the height of the trading range which will take the market to the 2021 high area. The bears want the bear trend line and the upper third of the multi-year trading range to be areas of resistance.

EURUSD Forex market

The Monthly EURUSD Forex chart

EURUSD Monthly - Bulls Want Retest 2021 High, Strong EURUSD Breakout
  • The June monthly EURUSD candlestick was a strong bull bar with a shaved (almost) body (candlestick with no tails at both ends).
  • Last month, we said traders would see if the bulls could create a strong retest and breakout above the April 21 high, closing June as a strong bull bar, or if the market would trade slightly higher, but stall around the April 21 high area and close with a long tail or a bear body instead.
  • The bulls got a strong breakout above the April 21 high.
  • Previously, they got a breakout above the trading range in April followed by a pullback in May.
  • They want a strong breakout and a measured move based on the height of the trading range which will take the market to the 2021 high area.
  • They must create follow-through buying in July.
  • The current move (since Jan 13) is in a 6-bar bull microchannel. That means persistent buying.
  • There may be buyers below the first pullback from such a strong bull microchannel.
  • If there is a larger pullback, the odds slightly favour at least a small second leg sideways to up, retesting the current leg’s extreme high (now July 1).
  • The bears see the rally as a bull leg and a buy vacuum test of the 2021 high.
  • They want the bear trend line and the upper third of the multi-year trading range to be areas of resistance.
  • They hope July will close with a long tail above or a bear body.
  • They must create strong bear bars to show they are back in control. They haven’t been able to do so yet.
  • So far, the bulls got a breakout above the top of the trading range.
  • If the bulls can create sustained follow-through buying, that would increase the odds of a measured move to the 2021 high area. So far, this looks to be the case.
  • Since June was a bull bar closing near its high (a shaved body candlestick), it is a sign of strength.
  • Odds favor July to trade at least a little higher.
  • Due to the 6-bar bull micro channel, the odds slightly favour buyers below the first pullback.
  • For now, traders will see if the bulls can create another strong bull bar in July.
  • Or will the market trade higher, but stall around the bear trend line or the May 2021 high area to close the candlestick with a long tail or a bear body instead?

The Weekly EURUSD chart

EURUSD Weekly - Bulls Want Measured Move Up
  • This week’s candlestick on the weekly EURUSD Forex chart was a bull bar closing around the middle of its range with a long tail above.
  • Last week, we said the odds of a successful breakout and a measured move would increase if the bulls could create strong follow-through buying above the April 21 high.
  • The bulls got follow-through buying following last week’s breakout above the April 21 high.
  • They want a measured move based on the height of the trading range which will take the market to the 2021 high area.
  • They want another big leg up to complete the wedge pattern, with the first two legs being March 18 and April 21. The third leg is currently underway.
  • The current leg is in an 8-bar bull microchannel which means persistent buying. There may be buyers below the first pullback.
  • If there is a pullback, they want it to be brief, followed by a retest of the current leg extreme high (now Jul 1).
  • The bears see the current move as a bull leg and a buy vacuum test of the multi-year trading range high.
  • They want a reversal from a wedge pattern (Mar 18, Apr 21, and Jul 1) and an embedded wedge (May 26, Jun 12, and Jul 1).
  • They want the upper third of the multi-year trading range or May 2021 high to act as areas of resistance and the move to form a lower high (vs May 2021).
  • They want a TBTL (Ten Bars, Two Legs) pullback lasting a few weeks.
  • They must create strong bear bars with sustained follow-through selling to show they are back in control.
  • The move up is in a tight bull channel with stronger buying pressure (big bull bars, consecutive bull bars) vs weaker selling pressure (bear bars with limited follow-through selling).
  • The current leg up is in an 8-bar bull microchannel which means persistent buying. There may be buyers below the first pullback.
  • Traders will see if the bulls can create more follow-through buying testing near the May 2021 high.  
  • Or will the market stall and form a pullback in the weeks ahead instead?
  • For now, the odds slightly favor sideways to up.

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