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Weekly EURUSD Bulls Want Follow-through Buying

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Market Overview: EURUSD Forex

The weekly EURUSD bulls want follow-through buying on the weekly chart followed by another strong leg up. They want another leg up to form the larger wedge pattern, with the first two legs being April 21 and July 1 highs. The bears want another leg down to form the wedge pattern (with the first two legs being Jul 17 and Aug 1 lows) from a double top bear flag (Jul 24 and Aug 13).

EURUSD Forex market

The Weekly EURUSD chart

EURUSD Weekly - Retest High or Double Top Bear Flag, Weekly EURUSD Bulls Want Follow-through Buying
  • This week’s candlestick on the weekly EURUSD Forex chart was a bull bar closing in its upper half with a prominent tail below.
  • Last week, we said the pullback (Aug 1) appears to be minor. Traders would see if the bears could create more follow-through selling, or if the pullback would remain weak and hold above the 20-week EMA instead.
  • So far, the pullback has overlapping ranges and is holding above the 20-week EMA with limited follow-through selling.
  • The bears see the recent move (Jul 1) as a bull leg and a buy vacuum test of the multi-year trading range high. They want the move to form a lower high (vs Jan 2021).
  • They want the upper third of the multi-year trading range, or the May 2021 high, to act as a resistance area.
  • They want a TBTL (Ten Bars, Two Legs) pullback lasting a few weeks.
  • They want another leg down to form the wedge pattern (with the first two legs being Jul 17 and Aug 1 lows) from a double top bear flag (Jul 24 and Aug 13).
  • Previously, the bulls got a strong move up in the form of a tight bull channel.
  • They want another leg up to form the larger wedge pattern, with the first two legs being April 21 and July 1 highs.
  • They want a measured move (based on the height of the trading range), which will take the market to the 2021 high area.
  • They see the current move as a two-legged pullback and hope that it has alleviated the recent overbought condition.
  • They want a retest and breakout above the July 1 high, followed by a resumption of the trend from a double bottom bull flag (Jul 17 and Aug 1) and a 20-gap bar buy setup.
  • They want the 20-week EMA and the bull trend line to act as supports.
  • The bulls need to create more follow-through buying to increase the odds of a resumption of the move.
  • So far, the move up (Jul 1) was in a tight bull channel, which means strong bulls.
  • The recent pullback (Aug 1) has overlapping candlesticks, bull bars, and prominent tails below candlesticks, indicating that the bears are not yet as strong as they had hoped.
  • Traders will see if the bulls can create more follow-through buying. If the pullback (Aug 1) remains weak (sideways with overlapping ranges, bull bars, prominent tails below candlesticks) and holding above the 20-week EMA, the odds of a retest and breakout above the July 1 high will increase within a few weeks.
  • Or will the market continue to stall below the July 24 high, followed by bear bars forming the third leg down instead?
  • For now, the pullback appears to be minor.

The Daily EURUSD chart

EURUSD Daily - Retest High or Double Top Bear Flag
  • The market traded sideways to up above the 20-day EMA for the week.
  • Last week, we said the pullback (Aug 1) may only be minor. Traders would see if the bulls could create more follow-through buying to retest the July 1 high, or if the market would stall below the July 24 high, followed by a third leg sideways to down instead.
  • The bears got a two-legged pullback (Aug 1) following the large wedge pattern (Mar 18, Apr 21, and Jul 1) and embedded wedge (May 26, Jun 12, and Jul 1).
  • They see the current move as a pullback forming a wedge bear flag (Aug 1, Aug 7, and Aug 13) and a larger double top bear flag (Jul 24 and Aug 13).
  • They want another sideways to down leg to form the wedge pattern (with the first two legs being July 17 and Aug 1 lows).
  • They want a retest of the August 1 low followed by a strong breakout below it.
  • They must create strong consecutive bear bars trading far below the 20-day EMA and the bear trend line to show they are back in control.
  • The bulls want a measured move (based on the height of the trading range), which will take the market to the 2021 high area.
  • They see the recent move (Aug 1) as a two-legged pullback and hope that it has alleviated the prior overbought condition.
  • They want another leg up to form the larger wedge pattern, with the first two legs being April 21 and July 1 highs.
  • They want a retest and breakout above the July 1 high, followed by a resumption of the trend.
  • If the market trades lower, they want the August 1 low and the bull trend line to act as areas of support, forming a wedge bull flag (the first two legs being July 17 and Aug 1 lows).
  • The bulls need to create strong consecutive bull bars to increase the odds of another leg up.
  • The prior move (Jul 1) was strong (in a tight bull channel), which means strong bulls.
  • The recent pullback (Aug 1) appears relatively weaker compared to the prior leg up (May 12 to Jul 1). The pullback may only be minor.
  • So far, the current leg up (Aug 13) is still a lower high. The bulls need to do more to show that they are back in control.
  • If the market continues to stall below or around the August 24 high for a few weeks, the odds of another leg down will increase.
  • For now, traders will see if the bulls can create more follow-through buying to retest the July 1 high.
  • Or will the market stall below the July 24 high, followed by a third leg sideways to down instead?

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