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Weekly EURUSD Bulls Need More Follow-through Buying

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Market Overview: EURUSD Forex

The weekly EURUSD bulls need more follow-through buying to increase the odds of trend resumption. Bulls expect the 20-week EMA and the November low to act as support, forming a large double bottom bull flag (Aug 1, Nov 5) and a wedge bull flag (Sep 25, Oct 9, Nov 5). Bears see the current bounce 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.

EURUSD Forex market

The Weekly EURUSD chart

EURUSD Weekly - Bulls Need FT, Bears Want LH MTR, Weekly EURUSD Bulls Need More Follow-through Buying
  • This week’s EURUSD candlestick was another follow-through bull bar closing in its upper half, with a small tail above.
  • Last week, we said traders would watch whether bulls could generate follow-through buying above the 20-week EMA and the bear trendline, or whether the market would stall and reverse back below the 20-week EMA.
  • Bulls succeeded in producing follow-through buying above the 20-week EMA and the bear trendline.
  • They view the November 5 selloff as a pullback within a broader bull trend.
  • They expect the 20-week EMA and the November low to act as support, forming a large double bottom bull flag (Aug 1, Nov 5) and a wedge bull flag (Sep 25, Oct 9, Nov 5). So far, this remains the case.
  • 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, creating a lower high relative to the January 2021 high, which is still the case so far.
  • Bears created a pullback from a higher-high major trend reversal (Sep 17) and a wedge top (Apr 21, Jul 1, Sep 17), but the November 5 selloff had overlapping bars, indicating bears are not yet decisively strong.
  • They see the current bounce 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 to show they are back in control.
  • The market has been in a 26-week trading range.
  • Traders may continue to Buy Low, Sell High within this range — buying near the lower third and selling near the upper third — until there is a clear breakout with strong follow-through.
  • The middle of the trading range can act as an area of balance and a magnet.
  • Traders will watch whether bulls can generate more follow-through buying toward the September 17 high area, or whether the market stalls and retests the 20-week EMA instead.
  • For now, the market could still be in the sideways to up phase.

The Daily EURUSD chart

EURUSD Daily - Bulls Need FT Buying, Lower High MTR
  • EURUSD traded sideways early in the week. Wednesday broke above the bull flag with follow-through buying on Thursday. Friday was an inside doji.
  • Last week, we said traders would watch whether bulls could produce more follow-through buying to break far above the November 13 and October 28 highs, or whether the market would stall and pull back to retest the November 21 low instead.
  • The market traded higher to test the October 17 high.
  • Bears created a pullback (Nov 5) from a higher-high major trend reversal and a large wedge top (Apr 21, Jul 1, Sep 17).
  • The selloff had several pushes with overlapping ranges, signaling bears are still not strong.
  • Bears see the current rally as a retest of the prior trend extreme high and want it to be weak — with overlapping bars and poor follow-through — and to stall below the September 17 high, forming a lower high major trend reversal.
  • They want the October 17 high to act as resistance, forming a double top bear flag (Oct 17 and Dec 11), followed by another sideways-to-down leg to retest the August 1 low.
  • Bears need strong consecutive bear bars closing near their lows to show they are back in control.
  • Bulls view the November 5 selloff as a pullback and a bear leg within a trading range.
  • They got a reversal from a large double bottom bull flag (Aug 1 and Nov 5) and a wedge bull flag (Sep 25, Oct 9, Nov 5).
  • Bulls want a strong retest and breakout above the September 17 high to resume the bull trend.
  • If the market trades lower, bulls want the 20-day EMA to hold as support.
  • Bulls need strong consecutive bull bars breaking above the October 17 high to increase the odds of testing the September 17 high.
  • EURUSD has been in a 133-day trading range.
  • Traders may continue to Buy Low, Sell High within the range — buying near the lower third and selling near the upper third — until there is a strong breakout with sustained follow-through.
  • The market is currently trading slightly above the middle of the trading range, which can act as an area of balance and a price magnet.
  • Traders will watch whether bulls can produce more follow-through buying to break far above the October 17 high, or whether the market stalls and pulls back to the 20-day EMA instead.

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