EURUSD Bear Doji

Market Overview: EURUSD Forex

The weekly candlestick was a EURUSD bear doji testing the triangle top. The bears want a reversal from a wedge bear flag from around the top of the triangle pattern. If there is a pullback, the bulls want at least a small second leg sideways to up to retest the current leg extreme high (Jul 17).

EURUSD Forex market

The Weekly EURUSD chart

• This week’s candlestick on the weekly EURUSD Forex chart was a doji with a long tail above.
• Last week, we said that the odds slightly favor the market to trade at least a little higher. Traders will see if the bulls can create another follow-through bull bar or will the market trade slightly higher but stall and close with a long tail above or a bear body?
• The market traded higher testing near the bear trend line in the first half of the week but reversed to close almost unchanged.
• Previously, the bulls had a reversal from a higher low major trend reversal and a wedge bull flag (Feb 14, Apr 16, and Jun 26).
• They created a 4-bar bull microchannel closing above the 20-week EMA testing near the bear trend line. Buyers may be below the first pullback from such a strong bull microchannel.
• While this week traded above the June high, the bulls weren’t able to create follow-through buying.
• They need to create a breakout above the June high and the triangle with follow-through buying to increase the odds of a retest of the trading range high (Dec 28).
• If there is a pullback, the bulls want at least a small second leg sideways to up to retest the current leg extreme high (Jul 17). They want the 20-week EMA to act as support.
• The bears see the current move simply as a buy vacuum and a bull leg within a trading range.
• They want a reversal from a wedge bear flag (Mar 8, Jun 4, and Jul 17) or a double top bear flag (Jun 4 and July 17) from around the top of the triangle pattern.
• They need to create a strong entry bar with follow-through selling to increase the odds of a deep pullback.
• They want the bear trend line to act as resistance.
• Since this week’s candlestick is a doji bar closing in its lower half with a long tail above, it is a sell signal bar for next week albeit weaker.
• However, it is following a 4-bar bull microchannel and a tight bull channel up. The first pullback may only be minor.
• Traders will see if the bears can create a strong entry bar or will the market trade slightly lower but stall and reverse higher.
• The market is trading around the upper third of the trading range which can be the sell zone of trading range traders.
• The bear trendline is an area of resistance.
• The EURUSD is in an 87-week trading range. (Trading range high: July 2023, Trading range low: Oct 2023). 
• Traders will continue to BLSH (Buy Low, Sell High) within a trading range until a breakout with follow-through selling/buying.
• Poor follow-through and reversals are hallmarks of a trading range.

The Daily EURUSD chart

• The EURUSD traded sideways to up in the first half of the week. Thursday was an inside bear bar with follow-through selling on Friday.
• Last week, we said that traders would see if the bulls can continue to create follow-through buying breaking above the June high and the triangle. Or will the market stall around the June high and form a pullback to the 20-day EMA?
• The bulls got a reversal from a higher low major trend reversal and a wedge bull flag (Feb 14, Apr 16, and Jun 26).
• They created a tight bull channel far above the 20-day EMA. That means strong bulls.
• While the market traded above the June high this week, there was no follow-through buying.
• If the market trades lower, the bulls want the 20-day EMA to act as support.
• They want at least a small second leg sideways to up to retest the current leg extreme high (Jul 17) after a pullback.
• The bears see the current move simply as a buy vacuum testing the trading range high and the bear trend line.
• They see a larger wedge bear flag forming (Mar 8, Jun 4, and Jul 17), a double top bear flag (Jun 4 and Jul 17) and a parabolic wedge (Jul 5, Jul 12, and Jul 17).
• They want a reversal from around the upper third of the trading range and want the bear trend line to act as resistance.
• They need to create follow-through selling trading below the 20-day EMA to increase the odds of testing the June low.
• So far, the move up from June 26 is in a tight bull channel therefore strong.
• The move lasted a long time and is slightly climactic.
• The odds slightly favor a minor pullback (likely 2-legged) which may have started this week.
• The move up is strong enough for traders to expect at least a small second leg sideways to up to retest the current leg extreme high (Jul 17) after the pullback.
• However, if the bears get strong consecutive bear bars, it could swing the odds in favor of the bear leg beginning.
• The market is trading around the upper third of the trading range which can be the sell zone of trading range traders.
• The bear trendline is an area of resistance.
• Traders will continue to BLSH (Buy Low, Sell High) within a trading range until there is a breakout with follow-through selling/buying.
• Poor follow-through and reversals are hallmarks of a trading range.

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