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EURUSD Strong Bear Leg

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Market Overview: EURUSD Forex

The market formed a EURUSD strong bear leg testing the trading range low. The bears want a retest of the trading range low followed by a strong breakout below. The bulls see the current move as a sell vacuum and a bear leg within a trading range. They want the trading range low to act as support.

EURUSD Forex market

The Weekly EURUSD chart

EURUSD Weekly - Test Trading Range Low, BO or DB BF, EURUSD Strong Bear Leg
  • This week’s candlestick on the weekly EURUSD Forex chart was a follow-through bear bar closing in its lower half with a small tail below.
  • Last week, we said the market may still trade slightly lower to test the June low area. Traders would see if the bears could create a strong follow-through bear bar or if the market will trade slightly lower but reverse to close with a long tail or a bull body instead.
  • The market broke below the June and April lows testing near the trading range low (Oct).
  • The bears got a second leg sideways to down following a pullback testing the 20-week EMA.
  • Next, they want a retest of the trading range low followed by a strong breakout below.
  • Because of the strong leg down (from Sept), the bears expect to get (at least) a small sideways to down leg to retest the current extreme low (now Nov 14) after a pullback.
  • The bulls see the current move as a sell vacuum and a bear leg within a trading range.
  • They want the trading range low to act as support.
  • If there is a breakout below the October low, they want a failed breakout followed by a retest of the middle of the trading range.
  • They want a reversal from a large double bottom bull flag (Oct 3 and Nov 14).
  • They must create consecutive bull bars closing near their highs to indicate that they are back in control.
  • Since this week’s candlestick is a bear bar closing in its lower half, it is a sell signal bar for next week.
  • The market may still trade slightly lower to test the October low area.
  • Traders will see if the bears can create a strong follow-through bear bar and a breakout below the trading range low.
  • Most breakouts from the trading ranges fail and odds favor the trading range to continue.
  • The market is trading near the trading range low which can be the buy zone of trading range traders.
  • The EURUSD is in a 105-week trading range. (Trading range high: July 2023, low: October 2023). 
  • Traders will BLSH (Buy Low, Sell High) within a trading range until a breakout with follow-through selling/buying.

The Daily EURUSD chart

EURUSD Daily - Strong Bear Leg, Sell Vacuum
  • The EURUSD traded down for the week followed by a weak pullback on Friday.
  • Last week, we said the market may still trade slightly lower (probably testing the June low area). Traders would see if the bears could get a strong retest and breakout below the June low or if the market would trade slightly lower but stall around the June or April lows area instead.
  • The market broke through both the June and April lows, testing near the trading range low.
  • The bulls see the current move as a sell vacuum and a bear leg test of the trading range low.
  • They want a reversal from a large double bottom bull flag (Oct 3 and Nov 14).
  • They hope that the trading range low will act as support.
  • If the market trades below the October low, they want a failed breakout followed by a reversal to the middle of the trading range.
  • They must create consecutive bull bars closing near their highs to indicate that they are back in control.
  • The bears got a strong second leg sideways to down after a pullback.
  • The move down is in a tight bear channel breaking several support areas. That means strong bears.
  • Friday broke above a 7-bar bear microchannel. Odds favor sellers above the first pullback from such a strong bear microchannel.
  • The next target for the bears is the trading range low. They want a strong breakout below the trading range.
  • If the market trades higher, the bears want the 20-day EMA or the bear trend line to act as resistance.
  • So far, the bear leg is strong.
  • The move down while strong, may still only be a sell vacuum within a trading range.
  • For now, the market may still trade at least a little lower to test the trading range low area.
  • Traders will see if the bears can continue to create strong follow-through selling, or if there is profit-taking activity around the trading range low area in the weeks ahead.
  • Most breakouts from trading ranges fail and odds favor the trading range to continue.
  • Because of the strong move down, odds favor at least a small second leg sideways to down after a pullback.
  • The low of the large trading range can be the buy 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.

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