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EURUSD Middle of the Trading Range

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Market Overview: EURUSD Forex

The market is currently trading around the EURUSD middle of the trading range which can be an area of balance. The bears want the 20-week EMA to act as resistance followed by at least a small retest of the April 16 low. The bulls need to create consecutive bull bars closing near their highs and trading far above the 20-week EMA to indicate that they are back in control.

EURUSD Forex market

The Weekly EURUSD chart

EURUSD Weekly: Middle of TR, Bull MC but Lower High, EURUSD Middle of the Trading Range
  • This week’s candlestick on the weekly EURUSD Forex chart was an inside bull doji trading below the 20-week EMA.
  • Last week, we said that the market is trading around the middle of the trading range. It is an area of balance.
  • The bears got a breakout below the triangle pattern and the smaller 22-week trading range but were not able to get follow-through selling.
  • They hope that the recent moves were simply a 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 micro wedge bear flag (Apr 18, Apr 26, and May 3).
  • They want to get at least another leg down completing the wedge pattern with the first two legs being February 14 and April 16. 
  • The bears want the 20-week EMA to act as resistance.
  • The bulls see the prior move down (to April 16) simply as a two-legged pullback (which started on Dec 28) and a bear leg within a trading range.
  • They want 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 have a 4-bar bull microchannel in the current leg up. That means persistent buying. 
  • They see this week simply as a pullback and want another leg up breaking above the 20-week EMA with follow-through buying.
  • They need to create consecutive bull bars closing near their highs and trading far above the 20-week EMA to indicate that they are back in control.
  • Since this week’s candlestick is a doji, the market is in breakout mode.
  • 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.
  • The market has reversed back to the middle of the trading range. It is an area of balance.
  • Traders will see if the bulls can get another follow-through bull bar closing above the 20-week EMA or will the bears be able to create a small pullback lower.
  • While the recent 4 consecutive bull bars are not very strong, the odds are slowly moving in favor of a failed breakout of the triangle pattern and the smaller 22-week trading range.
  • The EURUSD is in a 77-week trading range. (Trading range high: July 2023, Trading range low: Oct 2023). 
  • The lower third area of the large trading range could be a buy zone for trading range traders. 
  • 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.

The Daily EURUSD chart

EURUSD Daily: Wedge Bear Flag or Failed Breakout?
  • The EURUSD traded sideways for the week above the 20-day EMA.
  • Previously, we said that traders would see if the bears could create another leg down after the current pullback (bounce). The lower third of the large trading range can be the buy zone of trading range traders.
  • The bulls hope that the breakout from the triangle and the smaller trading range has failed.
  • They got a reversal from around the lower third of the large trading range, a higher low major trend reversal and a wedge bull flag (Dec 8, Feb 14, and Apr 16).
  • The move up since the April 16 low has a lot of overlapping candlesticks and has the shape of a wedge.
  • The bulls need to do more by creating strong consecutive bull bars closing near their highs and trading far above the 20-day EMA to increase the odds of retesting the December high.
  • If the market trades lower, they want a higher low major trend reversal or a double bottom with the April 16 low.
  • The bears got a breakout below the smaller trading range and the triangle pattern but got poor follow-through selling.
  • They see the current move simply as a pullback forming a wedge bear flag (Apr 18, Apr 26, and May 3) and a small double top (May 3 and May 10).
  • They want another leg down completing the larger wedge pattern with the first two legs being February 14 and April 16.
  • They want at least a small retest of the April 16 low, even if it only forms a higher low.
  • For now, traders will see if the bears can create another leg down after the current pullback (bounce).
  • The market is currently trading around the middle of the trading range which can be an area of balance.
  • 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.
  • The lower third of the large trading range can be the buy zone of trading range traders.

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