Curso de Trading do Brooks

Aprenda a operar price action consistentemente

 

More results...

EURUSD Pullback Below the Bull Microchannel

By

Market Overview: EURUSD Forex

The market formed a EURUSD pullback below the bull microchannel this week. The bulls want a retest of the recent leg extreme high (Jul 1) followed by a continuation of the move. The bears must create follow-through selling to increase the odds of a deeper pullback.

EURUSD Forex market

The Weekly EURUSD chart

EURUSD Weekly - PB Below Bull Microchannel, Bulls Need FT, EURUSD Pullback Below the Bull Microchannel
  • This week’s candlestick on the weekly EURUSD Forex chart was a bear bar closing in its lower half with a small tail below.
  • Last week, we said traders would see if the bulls could create more follow-through buying testing near the May 2021 high, or if the market would stall and form a pullback in the weeks ahead instead.
  • The market formed a pullback breaking the 8-bar bull microchannel streak.
  • The bulls got a strong move up in the form of a tight bull channel and 3 pushes (Mar 18, Apr 21, and Jul 1).
  • They want a strong breakout above the trading range and a measured move (based on the height of the trading range) which will take the market to the 2021 high area.
  • The recent 8-bar bull microchannel indicates persistent buying. There may be buyers below the first pullback.
  • If there is a deeper pullback, the bulls want the 20-week EMA to act as support followed by a retest of the recent leg extreme high (Jul 1) followed by a continuation of the move.
  • 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 follow-through selling to increase the odds of a deeper pullback.
  • The move up (Jul 1) 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 recent leg up (from the May 12 low) was in an 8-bar bull microchannel which means persistent buying. There may be buyers below the first pullback.
  • For now, traders will see if the bears can create strong follow-through selling.
  • Or will the move be brief, lacking follow-through selling and followed by a retest of the recent leg high (Jul 1) instead?
  • For now, the odds slightly favor the pullback to be minor.

The Daily EURUSD chart

EURUSD Daily - PB to EMA, Tight Bull Channel, Bears Need FT
  • The EURUSD formed a pullback to the 20-day EMA this week after trading above the April 21 high.
  • Previously, we said traders would see if the bulls could create more follow-through buying trading above the April 21 high, or if the market would stall and form a pullback instead.
  • The bears see the current move forming a large wedge pattern (Mar 18, Apr 21, and Jul 1) and an embedded wedge in the third leg up (May 26, Jun 12, and Jul 1).
  • They want a reversal from a higher high major trend reversal and a failed breakout followed by a retest of the middle of the trading range.
  • If the market trades higher, they see it as a retest of the prior trend extreme high (Jul 1) and want a lower high major trend reversal or a small double top.
  • They want at least a second leg sideways to down.
  • The bears must create strong consecutive bear bars trading far below the 20-day EMA to show they are back in control.
  • The bulls want a strong breakout above the trading range, followed by a measured move (based on the height of the trading range) which will take the market to near the 2021 high area.
  • The move up is in a tight bull channel and has 3 pushes, therefore a wedge pattern (Mar 18, Apr 21, and Jul 1).
  • They want the 20-day EMA or the bull trend line to be support areas.
  • If the market forms a deeper pullback, they want a higher low and a large double bottom bull flag with the May 12 low.
  • They want a retest of the recent trend extreme high (Jul 1) followed by a resumption of the trend.
  • The move up (Jul 1) while strong (tight bull channel), has lasted a long time and is slightly climactic.
  • The market may have to form a pullback before the move resumes higher. The pullback phase may be underway.
  • For now, traders will see the strength of the pullback. Will it be deep with strong follow-through selling?
  • Or will the move be sideways with overlapping ranges?
  • Odds slightly favor the pullback to be minor.

Market analysis reports archive

You can access all weekend reports on the Market Analysis page.

>