Brooks Trading Course

Learn to Trade Price Action Consistently

 

More results...

EURUSD Retesting August High

By

Market Overview: EURUSD Forex

The market is forming a EURUSD retesting August high on the weekly chart. The bulls want a breakout above the August 23 high followed by a retest of the July high. The bears 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 small double top (Aug 23 and Sep 25).

EURUSD Forex market

The Weekly EURUSD chart

EURUSD Weekly: Double Top or Breakout Above?, EURUSD Retesting August High
  • This week’s candlestick on the weekly EURUSD Forex chart was a bull doji closing in its upper half.
  • Last week, we said that traders would see if the bull could create a follow-through bull bar (even if it is a bull doji) breaking above the August high or if the market would trade slightly higher but stall around the August 23 high area instead.
  • The bulls got some follow-through buying but there was no strong breakout above the August 23 high yet.
  • They see the recent move (to Sep 11) as a two-legged pullback and want a resumption of the bull leg.
  • They want a breakout above the August 23 high followed by a retest of the July high (trading range high).
  • If the market trades lower, they want the bull trend line or the 20-week EMA to act as support.
  • The bears see the current bull leg as a buy vacuum test of the trading range high (Dec or July).
  • They see the last two weeks as a retest of the prior leg high (Aug 23) forming a higher high major trend reversal.
  • 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 small double top (Aug 23 and Sep 25).
  • They want the market to stall around the current levels (Aug high area) and begin the bear leg.
  • They need to create consecutive bear bars closing near their lows to increase the odds of the bear leg beginning.
  • If the market trades higher, they want a failed breakout above the August high.
  • Since this week’s candlestick is a bull doji closing in its upper half, it can be a buy signal bar albeit weaker.
  • Traders will see if the bull can create a breakout above the August high.
  • Or will the market stall around the August 23 high area and form some bear bars 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 97-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: Weak 2nd Leg Up, Stall or BO Above?
  • The EURUSD traded in a choppy sideways to up above the 20-day EMA.
  • Last week, we said that the odds slightly favor sideways to up still. Traders would see if the bull can create a breakout above the August high with follow-through buying or if the market would trade slightly higher but stall around the August high area and start to form bear bars instead.
  • So far, the market is stalling around the August high area.
  • The bulls got a retest of the August high and want a breakout with follow-through buying.
  • They see the recent move (Sep 11) as a two-legged pullback forming a double bottom bull flag (Sep 3 and Sep 11).
  • The next target for the bulls is the July high.
  • The problem with the bull’s case is that the retest of the August high has a lot of overlapping candlesticks. The bulls are not yet as strong as they hope to be.
  • They must create a strong breakout (above Aug high) with follow-through buying to increase the odds of testing the July high.
  • If the market trades lower, they want a reversal from a double bottom bull flag with the first leg being the September 11 low.
  • They want the 20-day EMA or the bull trend line to act as support.
  • The bears see the current move as a retest of the prior high (Aug 23), forming a higher high major trend reversal.
  • They want a reversal from a large double top bear flag (Dec 28 and Aug 23) and a small double top (Aug 23 and Sep 25), around the upper third of the large trading range.
  • While the retest of the August high is not as strong as the prior rally (overlapping candlesticks), the bears still need to create strong bear bars to indicate that they are back in control.
  • They must create consecutive bear bars closing near their lows and trading far below the 20-day EMA to increase the odds of the bear leg beginning.
  • For now, traders will see if the bull can create a breakout above the August high with follow-through buying. If they can do that, the odds of retesting the July high will increase.
  • Or will the market stall around the August high area and start to form a pullback towards the September 11 low instead?
  • If there is a pullback but it lacks follow-through selling, that will increase the odds of a retest and a breakout above the August high after that.
  • The market is trading near the upper third of the large trading range which can be the sell zone of trading range traders.
  • 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.

>