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EURUSD Triangle

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Market Overview: EURUSD Forex

The monthly chart formed a EURUSD triangle. The bulls need to create a follow-through bull bar in June to increase the odds of higher prices. If the market trades higher, the bears want a reversal from a double top bear flag with the March 8 high.

EURUSD

The Monthly EURUSD Forex chart

EURUSD Monthly: Middle of TR, Triangle, EURUSD Triangle
  • The May monthly EURUSD candlestick was a bull bar closing in its upper half and above the 20-month EMA.
  • Last month, we said that the market is trading around the middle of the trading range which is an area of balance. The odds for the bulls and bears remain quite equal.
  • The bulls want a reversal from a large wedge bull flag (Mar 15, Oct 3, and Apr 16).
  • They hope to get another leg up to retest the December 28 high.
  • They see the move down from December simply as a two-legged pullback.
  • Since May was a bull bar closing above the 20-month EMA, the bulls need to create a follow-through bull bar in June to increase the odds of higher prices.
  • They need to create a strong breakout above the bear trend line with sustained follow-through buying to convince traders that they are back in control.
  • 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 got a strong close below the 20-month EMA in April but were not able to create a follow-through bear bar in May.
  • They hope that the 20-month EMA and the bear trend line will act as resistance.
  • If the market trades higher, they want a reversal from a double top bear flag with the March 8 high.
  • Since May is a bull bar with a small tail above, it is a buy signal bar for June.
  • After the two-legged pullback (from Dec 28 to Apr 16) and the lack of follow-through selling (in May), odds slightly favor June to trade at least a little higher.
  • Traders will see if the bulls can create a follow-through bull bar (even if it is only a bull doji).
  • If they do, the odds of retesting the December high will increase.
  • The market is trading around the 20-month EMA, which is the middle of the trading range. It is an area of balance.
  • For now, the odds for the bulls and bears remain quite equal.
  • 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: Doji Closing above 20-Week EMA
  • This week’s candlestick on the weekly EURUSD Forex chart was an outside doji closing in its upper half.
  • Last week, we said that the bulls want a breakout above while the bears want a breakout below the inside bar. The first breakout can fail 50% of the time and sometimes there may be buyers below the first pullback from a strong bull microchannel.
  • The market first broke above the inside bar but failed and then broke below it after that but had limited follow-through selling. The market then reversed back to almost unchanged.
  • The bulls got a reversal from around the lower third of the large trading range from a higher low major trend reversal, a larger wedge bull flag (Mar 15, Oct 3, and Apr 16) and a wedge in the third leg down (Dec 8, Feb 14, and Apr 16).
  • They had a 6-bar bull microchannel in the recent move. That means persistent buying.
  • Sometimes there may be buyers below the first pullback from such a strong bull microchannel. It was the case this week.
  • The bulls see the last two weeks simply as a pullback and want another leg up testing the March 8 high.
  • They need to create follow-through buying trading above the 20-week EMA to increase the odds of retesting the December high.
  • They want the 20-week EMA to continue acting as support.
  • The bears see the recent moves simply as a deep pullback and want at least a small retest of the April 16 low (even if it forms a higher low).
  • They want a reversal from a double top bear flag (Apr 9 and May 16) and a small double top (May 16 and May 28).
  • If the market trades higher, the bears want a larger double top bear flag with the March 8 high.
  • They hope to get another leg down completing the wedge pattern with the first two legs being February 14 and April 16. 
  • The bears hope that the bear trend line will act as resistance.
  • Since this week’s candlestick is a doji bar, it is a neutral signal bar for next week.
  • Because of the tight bull channel, odds slightly favor the market to still be in the sideways to up phase.
  • Traders will see if the bull can create a follow-through bull bar trading above the 20-week EMA.
  • The market is currently trading around the middle of the trading range. It is an area of balance.
  • The EURUSD is in an 80-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 there is a breakout with follow-through selling/buying.
  • Poor follow-through and reversals are hallmarks of a trading range.

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