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EURUSD Bulls Want Follow-through Buying

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Market Overview: EURUSD Forex

The EURUSD bulls want follow-through buying to retest the top of the trading range (Aug/Sep highs). The bears hope the market will stall around the middle of the trading range and form a lower high. The move is strong enough for traders to expect at least a small second leg sideways to up after a pullback.

EURUSD Forex market

The Weekly EURUSD chart

EURUSD Weekly - Bulls Want Retest Trading Range High, EURUSD Bulls Want Follow-through Buying
  • This week’s candlestick on the weekly EURUSD Forex chart was a bull bar closing below the middle of its range with a long tail above.
  • Last week, we said traders would see if the bulls could create a follow-through bull bar or if the market would lack follow-through buying.
  • The bulls got follow-through buying testing the November 6 high but the long tail above the candlestick indicates some profit-taking activity.
  • Previously, the bulls got 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 20, Jan 2, and Jan 13) and a higher low major trend reversal (Feb 3).
  • They hope the bull leg to retest the top of the trading range (Aug/Sep highs) is underway.
  • 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 11).
  • 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 the middle of the trading range or the November 6 high will act as resistance.
  • If the market trades higher, they want a reversal from a micro wedge pattern (with the first two legs being Mar 7 and Mar 11).
  • So far, the market formed a strong bull leg testing the middle of the trading range. The market could still trade slightly higher.
  • The move is strong enough for traders to expect at least a small second leg sideways to up after a pullback.
  • For now, traders will see if the bulls can create more follow-through buying.
  • Or will the market continue to stall around the November 6 high area instead?
  • The market is trading around the middle of the trading range which is an area of balance and a magnet.
  • Traders will BLSH (Buy Low, Sell High) within the trading range until there is a breakout from either direction with sustained follow buying/selling.
  • That means buying in the lower third and selling in the upper third of the trading range.

The Daily EURUSD chart

EURUSD Daily - Bulls Want 2nd Leg Up, Bears Want Lower High
  • The EURUSD traded higher early in the week followed by a small pullback from midweek onward.
  • Last week, we said traders would see if the bulls could continue to create more follow-through buying trading above the November 6 high, or if the market would stall around the current levels (middle of the trading range or the November 6 high area) instead.
  • The market traded slightly higher to test the November 6 high but there was no strong breakout above it yet.
  • The bulls got 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 20, Jan 2, and Jan 13) and a higher low major trend reversal (Feb 3).
  • They hope 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 11).
  • The bears see the current move as a buy vacuum and a bull leg within the trading range.
  • They hope the middle of the trading range, or the November 6 high will act as resistance.
  • They want the market to form a lower high.
  • If the market trades higher, they want a reversal from a wedge pattern (with the first two legs being Mar 7 and Mar 11).
  • So far, the bull leg within the trading range is currently underway. The market could still trade slightly higher.
  • The move up is strong enough for traders to expect at least a small second leg sideways to up after 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) followed by a deeper pullback instead?
  • The market is trading around the middle of the trading range which is an area of balance.
  • Traders will BLSH (Buy Low, Sell High) until there is a breakout from either direction with sustained follow-through buying/selling.
  • That means buying in the lower third and selling in the upper third of the large trading range.

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