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Monthly EURUSD Double Bottom Bull Flag

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Market Overview: EURUSD Forex

The market formed a monthly EURUSD double bottom bull flag (August 1 and November 5). Bulls need strong follow-through buying breaking above the September 17 high to increase the odds of the bull trend resuming. Bears want a reversal from a wedge top (April 21, July 1, and September 17) and a lower high major trend reversal (December 24).

EURUSD Forex market

The Monthly EURUSD Forex chart

EURUSD Monthly - Double Bottom Bull Flag, Bulls Need FT, Monthly EURUSD Double Bottom Bull Flag
  • The December EURUSD monthly candlestick was a bull bar closing in its upper half, with a prominent tail above.
  • Last month, we said traders would watch whether bulls could create a strong bull entry bar in December. If so, the yearly candlestick would close near its high, increasing the odds of EURUSD trading at least slightly higher in 2026.
  • Bulls created a decent bull entry bar in December.
  • Bulls see the November 5 move as a pullback in a bull trend.
  • They want the pullback to be weak and sideways, with overlapping bars, long tails below, and poor follow-through selling. So far, this remains the case.
  • Bulls want the August low to act as support, forming a double bottom bull flag (August 1 and November 5).
  • They need strong follow-through buying breaking above the September 17 high to increase the odds of the bull trend resuming.
  • Bears see the September 17 rally as a bull leg in a multi-year trading range and a buy vacuum test of resistance.
  • They want the rally to form a major lower high relative to the January 2021 high. So far, this remains the case.
  • They see the bear trend line and the upper third of the multi-year trading range as resistance.
  • They want a reversal from a wedge top (April 21, July 1, and September 17) and a lower high major trend reversal (December 24).
  • Bears need consecutive strong bear bars breaking below the August low to show control.
  • If the market trades higher, bears want it to stall around the September 17 high, forming a small double top.
  • The buying pressure since the January low has been stronger (tight bull channel) than the selling pressure (bear bars with no follow-through).
  • The wedge top and loss of momentum increase the odds of a minor pullback, which likely began in October.
  • Traders will watch whether bears can create bear bars to form a second leg sideways to down, or whether the pullback remains weak and sideways as it has been through most of 2025.
  • Otherwise, traders will see the sideways trading range as a pullback and bull flag, followed by a retest of the September high in the months ahead.
  • For now, traders will monitor whether bulls create a strong follow-through bull bar in January to test the September 17 high, or will the market stall below that high, followed by a second leg sideways to down?
  • For now, the November 5 pullback appears minor.

The Weekly EURUSD chart

EURUSD Weekly - Bears Want LH MTR, 7-Bar Bull MC
  • This week’s EURUSD candlestick was an inside bear bar closing near its low.
  • Last week, we said traders would watch whether bulls could produce further follow-through buying toward the September 17 high, or whether the market stalls and retests the 20-week EMA.
  • The market traded sideways to down for the week.
  • Bulls produced a retest of the recent trend extreme high (September 17), forming a lower high on December 24.
  • Bulls view the November 5 selloff as a pullback within a broader bull trend, forming a double bottom bull flag (August 1 and November 5).
  • The rally from the November 21 low formed a 7-bar bull microchannel, indicating persistent buying; buyers may appear below its first pullback.
  • If the market trades lower, bulls want the 20-week EMA to act as support, followed by at least a small sideways-to-up leg to retest the December 24 high.
  • Bulls need a strong retest and breakout above the September 17 high to resume the bull trend.
  • Bears want the upper third of the multi-year trading range to act as resistance, maintaining a lower high relative to the January 2021 high, which remains the case so far.
  • Bears view the current pullback (December 24) as a retest of the prior trend extreme high and want it to stall below the September 17 high to form a lower high major trend reversal.
  • Bears need strong consecutive bear bars breaking well below the 20-week EMA to demonstrate control.
  • The market has been in a 29-week trading range.
  • Until there is a clear breakout with strong follow-through, traders may continue to Buy Low, Sell High (BLSH), buying near the lower third and selling near the upper third of the range.
  • The market is trading slightly above the middle of the range, which can act as an area of balance and a magnet.
  • Traders will watch whether bulls can produce further follow-through buying toward the September 17 high, or whether the market stalls and retests the 20-week EMA.
  • There could be buyers below the first pullback from the 7-bar bull microchannel.
  • For now, the market could remain in a sideways-to-up phase, even with a pullback to the 20-week EMA in the week ahead.

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