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EURUSD Weak Breakout from OO

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Market Overview: EURUSD Forex

The EURUSD Forex weekly candlestick was a EURUSD weak breakout from an OO (outside-outside) pattern. The bulls will need to create follow-through buying to increase the odds of a retest of the February high. The bears want a failed breakout above the OO pattern and a breakout below instead. They want a reversal down from a lower high major trend reversal. 

EURUSD Forex market

The Weekly EURUSD chart

EURUSD Weak Breakout above OO, DT, LH MTR on Weekly Chart
  • This week’s candlestick on the weekly EURUSD Forex chart was a bull bar with a long tail above.
  • Last week, we said that traders will wait for a breakout from either direction of the OO (outside-outside) pattern with follow-through price action for more clarity.
  • This week broke above the OO pattern, but the weekly candlestick closed below the middle of its range. It has the look of a reversal bar.
  • The bears want a second leg sideways to down from a lower high major trend reversal. They see the last 3 weeks as forming a micro wedge (Mar 7, Mar 15, and Mar 23).
  • The next targets for the bears are the March 15 low and January 6 low. 
  • The bears understand that the first breakout from an OO pattern has a 50% chance of failure.
  • They will need to create follow-through selling next week to increase the odds of lower prices.
  • If the EURUSD trades higher, they want a reversal down from a lower high major trend reversal or a double top with the February high.
  • The bulls got a strong spike and channel up from September 2022 and the market may have flipped into Always In Long. 
  • The strong move up increases the odds of at least a small second leg sideways to up. It is happening now.
  • They got a reversal up from a double bottom bull flag with January 6 low to retest near the February high.
  • This week formed a lower high and the bulls did not get a strong bull bar.
  • The bulls need to create follow-through buying to increase the odds of a retest of the February high.
  • If the EURUSD trades lower, the bulls want the 20-week exponential moving average to remain as support.
  • Since this week was a bull bar closing below the middle of its range with a long tail above, it is not a strong buy signal bar.
  • Traders will see if the bulls can create a follow-through bull bar or will the bears create a failed breakout of the OO pattern instead.
  • The recent weeks had a lot of overlapping candlesticks, tails and dojis which indicates poor follow-through and reversals.
  • Those are hallmarks of trading range activities. 
  • Traders will BLSH (Buy Low, Sell High) until there is a strong breakout from either direction with follow-through buying/selling.

The Daily EURUSD chart

EURUSD Daily: Triangle, Wedge, LH MTR or New BO?
  • The EURUSD traded higher in the first half of the week. Thursday traded higher but reversed into a bear reversal bar closing near its low with follow-through selling on Friday.
  • Last week, we said that traders will wait for a breakout from either direction of the triangle with follow-through price action for more clarity.
  • This week broke above the triangle with some follow-through buying. Is this a breakout of the triangle or another leg within a larger expanding triangle?
  • The bears see the move up since September as a 50% pullback of the selloff which started in May 2021.
  • They want a second leg sideways to down from a lower high major trend reversal (with Feb high) and a wedge bear flag (Mar 7, Mar 15, and Mar 23).
  • The next targets for the bears are the March 15 low and January 6 low.
  • The bears need to create consecutive bear bars closing near their lows trading far below the January 6 low to convince traders of a deeper selloff.
  • The bulls got a strong spike & channel up from October.
  • The move up was strong enough to have flipped the market into Always In Long. 
  • They want a larger second leg sideways to up from a double bottom bull flag with January 6 low. They got that this week.
  • The second leg up has a lot of overlapping candlesticks which indicates that the bulls are not yet very strong.
  • The bulls hope that Thursday and Friday were simply a pullback. They want another leg higher to retest and breakout above the February high. 
  • For now, the EURUSD may be forming a larger expanding triangle.
  • If the bears get follow-through selling next week, it could be a continuation of the triangle pattern.
  • Since the EURUSD is in a trading range, traders will BLSH (Buy Low, Sell High) until there is a strong breakout from either direction.
  • Poor follow-through and reversals are hallmarks of a trading range.
  • It may be slightly more helpful to see the current move up from March 15 low as a bull leg within a trading range, which will be followed by a bear leg thereafter.

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