Brooks Trading Course

Learn to Trade Price Action Consistently

 

More results...

Monthly EURUSD Tight Trading Range

By

Market Overview: EURUSD Forex

The market formed a monthly EURUSD tight trading range with candlesticks that are overlapping with alternating bull and bear bodies. The bulls hope to get another leg up breaking above the triangle to retest the December 28 high. The bears hope that the 20-month EMA and the bear trend line will act as resistance.

EURUSD Forex market

The Monthly EURUSD Forex chart

EURUSD Monthly: No FT Selling, Middle of TR, Triangle, TTR, Monthly EURUSD Tight Trading Range
  • The July monthly EURUSD candlestick was a bull bar with a long tail above and closing 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 market is in a tight trading range and the odds for the bulls and bears remain quite equal.
  • The market traded higher but closed off its high. The bears were not able to create a follow-through bear bar.
  • 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 breaking above the triangle to retest the December 28 high.
  • So far, the move up from the April 16 low has overlapping price action. The bulls are not yet as strong as they hoped to be.
  • They need to create a follow-through bull bar in August to increase the odds of testing the trading range high.
  • The bears got a two-legged move trading below the 20-month EMA in April but lacked follow-through selling.
  • They got a bear bar closing below the 20-month EMA in June but could not create follow-through selling in July.
  • They see the current move simply as a two-legged pullback with the first two legs being May 16 and July 17.
  • They hope that the 20-month EMA and the bear trend line will act as resistance.
  • Since July is a bull bar with a long tail closing above the 20-month EMA, traders will see if the bulls can create a follow-through bull bar breaking above the triangle.
  • The market is trading around the 20-month EMA, which is the middle of the trading range. It is an area of balance.
  • The last 4 candlesticks are overlapping with alternating bull and bear bodies which means that the market is in a tight trading range.
  • The odds for the bulls and bears remain quite equal.
  • Poor follow-through and reversals are hallmarks of a trading range.
  • Traders will BLSH (Buy Low, Sell High) until there is a breakout with sustained follow-through buying/selling from either direction.

The Weekly EURUSD chart

EURUSD Weekly: 2nd Leg Sideways to Up
  • This week’s candlestick on the weekly EURUSD Forex chart was a bull bar closing near its high with a long tail below.
  • Last week, we said that traders would see if the bears can create a follow-through bear bar. Or will the market stall around the 20-week EMA followed by a retest of the July 17 high?
  • The market traded lower for the week, trading below the 20-week EMA. Friday reversed the move into a bull bar closing above last week’s high.
  • 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. That means strong bulls.
  • They want at least a small second leg sideways to up to retest the July 17 high and want the 20-week EMA to act as support. So far, this is the case.
  • The bulls will need to create a follow-through bull bar breaking above the triangle to increase the odds of higher prices.
  • The bears see the recent move (to the July 17 high) 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.
  • However, they were not able to create a follow-through bear bar this week which indicates that they are not yet as strong as they hoped to be.
  • They want a reversal from a small double top with July 17 and want the bear trend line to act as resistance.
  • Since this week’s candlestick is a bull bar closing near its high, it is a buy signal bar for next week.
  • For now, odds slightly favor the market to trade at least a little higher.
  • Traders will see if the bulls can create a follow-through bull bar breaking above the triangle, or will the market trade slightly higher but stall and close with a long tail or a bear body
  • 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 89-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.

Market analysis reports archive

You can access all weekend reports on the Market Analysis page.

>