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Monthly EURUSD Buy Vacuum

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Market Overview: EURUSD Forex

The market formed a monthly EURUSD buy vacuum test of the trading range high. The bulls need to create a follow-through bull bar in September following the breakout above the triangle to increase the odds of a breakout above the July high. The bears want a reversal from a double top bear flag (Dec 28 and Aug 23) and from around the top of the large trading range.

EURUSD Forex market

The Monthly EURUSD Forex chart

EURUSD Monthly: Buy Vacuum, Bull Leg, DT Bear Flag, Monthly EURUSD Buy Vacuum
  • The August monthly EURUSD candlestick was a big bull bar with a long tail above, breaking above the triangle and testing the trading range high.
  • Last month, we said that traders would see if the bulls can create a follow-through bull bar breaking above the triangle. The odds for the bulls and bears remain quite equal.
  • The bulls got a reversal from a large wedge bull flag (Mar 15, Oct 3, and Apr 16).
  • They got another leg up breaking above the triangle to retest the December 28 high.
  • The next target for the bulls is the July high. They want a strong retest of the July high and a breakout with follow-through buying.
  • They need to create a follow-through bull bar in September following the breakout above the triangle to increase the odds of a breakout above the July high.
  • The bears see the current move as a buy vacuum test of the trading range high.
  • They want a reversal from a double top bear flag (Dec 28 and Aug 23) and from around the top of the large trading range.
  • They also see a larger double top bear flag forming (July 18 and Aug 23).
  • They hope to retest the middle of the trading range (around the 20-month EMA).
  • Since August is a bull bar closing in its upper half with a long tail above, it is a buy signal bar albeit weaker.
  • Traders will see if the bulls can create a follow-through bull bar testing the trading range high following the breakout from the triangle.
  • If they do especially if it is a strong follow-through bull bar, it will increase the odds of a breakout attempt above the large trading range.
  • Or will the market form a bear bar (perhaps a bear inside bar) testing the middle of the trading range instead?
  • Poor follow-through and reversals are hallmarks of a trading range.
  • Traders will BLSH (Buy Low, Sell High) until a breakout with sustained follow-through buying/selling from either direction.

The Weekly EURUSD chart

EURUSD Weekly: No FT Buying, Bears Need FT Selling
  • This week’s candlestick on the weekly EURUSD Forex chart was a big bear bar closing near its low.
  • Last week, we said that traders would see if the bulls can create another follow-through bull bar or if the market would trade slightly higher but stall and close with a long tail or a bear body. The upper third of the large trading range can be the sell zone of trading range traders.
  • The market formed a micro double top and traded down for the week.
  • The bulls got a breakout above the December 28 high. However, they could not create follow-through buying following last week’s breakout.
  • They hope that this week was simply a pullback. They want at least a small retest of the August 26 high.
  • The bears see the recent rally as a buy vacuum test of the trading range high (July high).
  • The bears see that the lack of follow-through buying this week (following the breakout above the December high) suggests that the recent rally could be a buy vacuum test of the trading range high (July).
  • They want a reversal from around the upper third of the large trading range from a double top bear flag (Dec 28 and Aug 23) and a micro double top (Aug 23 and Aug 26).
  • They need to create a strong follow-through bear bar next week to increase the odds of a retest of the middle of the trading range.
  • Since this week’s candlestick is a bear bar 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.
  • Traders will see if the bears can create a follow-through bear bar.
  • If they do, that will increase the odds of a pullback to the middle of the trading range.
  • Or will the market trade slightly lower but close with a long tail or bull body instead?
  • The market trades around the upper third of the large trading range which can be the sell zone of trading range traders.
  • The EURUSD is in a 93-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.

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