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Weekly EURUSD Bears need Follow-through

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Market Overview: EURUSD Forex

The weekly Eurusd bears need follow-through selling next week to increase the odds of a bear leg. The bulls see the last two weeks as a pullback and retest of the breakout point. They want the market to form a higher low, followed by a retest of the September 25 high and the bull trend line or the 20-week EMA to act as support.

EURUSD Forex market

The Weekly EURUSD chart

EURUSD Weekly: Bears Need More FT, Weekly EURUSD Bears need Follow-through
  • This week’s candlestick on the weekly EURUSD Forex chart was a small bear bar closing below the middle of its range with tails above and below (looks like a doji bar).
  • Last week, we said that the odds slightly favor the market to trade a little lower. Traders would see if the bears could create a follow-through bear bar closing below the 20-week EMA or if the market would trade lower but reverse to close with a long tail or a bull body instead.
  • The bears got a follow-through bear bar closing below the 20-week EMA.
  • They see the recent bull leg as a buy vacuum test of the trading range high (Dec or July).
  • They got a reversal from around the upper third of the large trading range from a double top bear flag (Dec 28 and Aug 23), a higher high major trend reversal (Sep vs Aug) and a small double top (Aug 23 and Sep 25).
  • They hope to get the start of the bear leg. They want a test of the middle of the trading range at least.
  • Since this week closed below the 20-week EMA, the bears must create a follow-through bear bar to increase the odds of lower prices.
  • If the market trades higher, they want it to form a lower high followed by a second leg sideways to down.
  • The bulls broke out above the August 23 high (in September) but lacked follow-through buying.
  • They see the last two weeks as a pullback and retest of the breakout point.
  • They want the market to form a higher low, followed by a retest of the September 25 high and the bull trend line or the 20-week EMA to act as support.
  • Since this week’s candlestick is a bear bar closing slightly below the middle of its range, it can be a sell signal bar for next week.
  • Traders will see if the bears can create another follow-through bear bar.
  • Or will the market trade slightly lower but stall around the October 10 low area and form a pullback higher instead?
  • The middle of the trading range can be an area of balance.
  • The EURUSD is in a 100-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

EURUSD Daily: PB to Breakout Point
  • The EURUSD formed a small pullback early in the week followed by a move lower on Wednesday. Thursday traded lower but closed around unchanged. Friday was an inside bull doji.
  • Previously, we said that traders would see if the bull could create a breakout above the August high with follow-through buying or if the market would stall around the August high area and start to form a pullback towards the September 11 low instead.
  • The market stalled at the August high area and formed a pullback.
  • The bulls got a retest of the August high (in September) but could not create a strong breakout.
  • They see the current move as a pullback (possibly two-legged) following a wedge pattern (Jul 17, Aug 23, and Sep 25) and a double top (Aug 23 and Sep 25).
  • They want the pullback to form a higher low followed by a retest of the September 25 High.
  • They must create a few strong consecutive bull bars to indicate that they are back in control.
  • The bears got a reversal from a large double top bear flag (Dec 28 and Aug 23), a wedge pattern (Jul 17, Aug 23, and Sep 25) and a small double top (Aug 23 and Sep 25), around the upper third of the large trading range.
  • The move down is in a tight bear channel which means persistent selling.
  • If there is a pullback, the bears want a second leg sideways to down to retest the current leg low (now Oct 10).
  • For now, traders will see if the bull can create a pullback towards the 20-day EMA.
  • Or will the market form a second leg sideways to down (towards the middle of the trading range) after a pullback?
  • Poor follow-through and reversals are hallmarks of a trading range.
  • Traders will continue to BLSH (Buy Low, Sell High) within a trading range until a breakout with follow-through selling/buying.

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