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EURUSD Consecutive Doji

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Market Overview: EURUSD Forex

The monthly chart formed a EURUSD consecutive doji in the middle of the trading range. The market is in an area of balance. The bulls want the 20-month EMA or the bull trend line to act as support. The bears hope that March was simply a pullback which formed a lower high and they want at least another leg down.

EURUSD Forex market

The Monthly EURUSD Forex chart

EURUSD Monthly: Consecutive Doji in Middle of Trading Range, EURUSD Consecutive Doji
  • The March monthly EURUSD candlestick was another doji bar closing slightly below the 20-month EMA with a long tail above.
  • Last month, we said that the market is trading around the middle of the trading range which is an area of balance. Poor follow-through and reversals are hallmarks of a trading range.
  • The market traded higher in the first half of the month but reversed to close with a small bear body.
  • The bulls got a reversal from a double bottom bull flag (Jan 6 and Oct 3) and a retest of the trading range high.
  • However, they were not able to get sustained follow-through buying and the market reversed back to the middle of the trading range.
  • They got a small second leg sideways to up to retest the December high in March, but it formed a lower high and lacked follow-through buying.
  • They want the 20-month EMA or the bull trend line to act as support. 
  • They hope to get another leg up to retest the December 28 high.
  • The bears see the prior move up (Dec 28) as a retest of the July high and got a reversal from a lower high major trend reversal.
  • They see the market as being in a 16-month trading range.
  • They managed to get a strong bear bar closing near its low in January but did not get a strong follow-through bear bar in February.
  • They hope that March was simply a pullback which formed a lower high and want at least another leg down.
  • They will need to create follow-through selling below the 20-month EMA to increase the odds of a retest of the October low.
  • Since March is a doji bar, it is a neutral signal bar for next month.
  • The market has formed consecutive doji(s) and remains in the middle of the 16-month trading range. It is an area of balance.
  • For now, the odds for the bulls and bears are quite equal.
  • After a weak move higher in March, we could see the market do the opposite by trading lower in April.
  • Traders will see if the bears can create a bear bar in April trading below the 20-month EMA. If they do, it will increase the odds of a retest of the October low.
  • However, if the market continues to hold around the 20-month EMA for a couple of months, the odds of a retest of the December high will increase. This remains true.
  • Traders will BLSH (Buy Low, Sell High) until there is a breakout with sustained follow-through buying/selling from either direction.
  • Poor follow-through and reversals are hallmarks of a trading range.

The Weekly EURUSD chart

EURUSD Weekly: FT Selling but no BO below Triangle yet
  • This week’s candlestick on the weekly EURUSD Forex chart was a bear doji closing below the 20-week EMA.
  • Last week, we said that odds slightly favor the market to trade at least a little lower and traders will see if the bears can create a follow-through bear bar following last week’s close below the 20-week EMA.
  • The bears got some follow-through selling this week. Previously, they got a reversal from a wedge bear flag (Nov 3, Nov 29, and Dec 28) and a lower high major trend reversal.
  • They see the recent pullback (to March 8) as forming another lower high major trend reversal (against Dec high).
  • They want a reversal from the upper third of the large trading range and a breakout below the large triangle pattern.
  • While this week traded below the triangle, the breakout is not strong. 
  • The bears need to create a strong breakout with follow-through selling to convince traders that a retest of the October low is underway.
  • The bulls got a 2-legged sideways to up pullback from a double bottom bull flag (Dec 8 and Feb 14).
  • However, they were not able to get follow-through buying following the recent close above the 20-week EMA (Mar 8).
  • They hope that the current move is simply a pullback and want a retest of the March 8 high followed by a breakout above.
  • They want a reversal from a wedge bull flag (Dec 8, Feb 14, and Mar 29) and the 20-week EMA or the bull trend line to act as support. 
  • Since this week’s candlestick was a bear doji, it is a sell signal bar albeit weak.
  • The market is also trading around the middle of the trading range which could be an area of balance.
  • For now, odds slightly favor the market to trade at least a little lower.
  • Traders will see if the bears can create a breakout below the triangle.
  • Or will the market trade slightly lower, but find support around the bull trend line area?
  • Poor follow-through and reversals are hallmarks of a trading range.
  • The EURUSD is in a 70-week trading range. (Trading range high: July 2023, Trading range low: Oct 2023). 
  • The EURUSD has been in a smaller trading range in the last 20 weeks. 
  • 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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