Market Overview: EURUSD Forex
The weekly chart formed a bear doji closing near its low therefore was an EURUSD bad follow-through candlestick. If a pullback begins, the bulls want the 20-week EMA to act as support, followed by a reversal from a double bottom bull flag. The bears want a reversal from a wedge bear flag (Nov 3, Nov 29, and Dec 28) and a lower high major trend reversal.
EURUSD Forex market
The Monthly EURUSD Forex chart
- The December monthly EURUSD candlestick was a bull bar closing slightly above the November high with a prominent tail above.
- Last month, we said that the odds slightly favor the market to still be in the sideways to up phase.
- The bulls got a reversal from a double bottom bull flag (Jan 6 and Oct 3).
- They got a strong entry bar in November by closing above October high and the 20-week EMA.
- They then got a follow-through bull bar in December.
- They hope to get a large second leg up lasting many months with the first leg being the September 2022 to July 2023 rally.
- The bears got a reversal down testing the trading range low (Jan low) but were not able to get sustained follow-through selling.
- They hope that the current move is simply a retest of the July high and want a reversal from a lower high major trend reversal.
- They see the market as being in a 13-month trading range and the EURUSD is currently trading in the sell zone of trading range traders.
- Since December is a bull bar closing in its upper half, it is a buy signal bar for January albeit weaker (prominent tail above). It is not a strong sell signal bar.
- For now, odds slightly favor the market to still be in the sideways to up phase.
- Traders will see if the bulls can create another follow-through bull bar in January. If they do, it will increase the odds of a retest and breakout attempt above the July high.
The Weekly EURUSD chart
- This week’s candlestick on the weekly EURUSD Forex chart was a bear doji with a long tail above.
- Last week, we said that the odds continue to slightly favor the market to still be Always In Long.
- This week traded higher earlier in the week but gave back all of the gains by Friday.
- The bulls want a retest of the July high followed by a continuation higher in the form of a large second leg up (with the first leg being September 2022 to July 2023 rally).
- They got a second leg sideways to up after a test of the 20-week EMA.
- While they got some follow-through buying above the November 29 high, the long tail above the weekly candlestick indicates that the bulls are not yet as strong as they hope to be.
- If a pullback begins, the bulls want the 20-week EMA to act as support, followed by a reversal from a double bottom bull flag with the first leg being the December 8 low.
- The bears see the rally since October as a retest of the prior leg’s extreme high.
- They want a reversal from a wedge bear flag (Nov 3, Nov 29, and Dec 28) and a lower high major trend reversal.
- They need to create a few strong consecutive bear bars closing below the 20-week EMA to increase the odds of retesting the trading range low.
- Since this week’s candlestick is a bear doji closing near its low, it is a sell signal bar for next week.
- Odds slightly favor the market to trade at least a little lower.
- For now, odds slightly favor the pullback to be minor even if it last 1-3 weeks and the market to still be Always In Long.
- However, if the bears manage to create a few strong consecutive bear bars closing below the 20-week EMA, odds will swing in favor of the bear leg beginning.
- The EURUSD is in a 57-week trading range. Traders will continue to BLSH (Buy Low, Sell High) within a trading range until there is a breakout with follow-through selling/buying.
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