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EURUSD bear breakout below 2017 low

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Market Overview: EURUSD Forex

EURUSD bear breakout on weekly candlestick below the 7-year trading range. Bears want a measured move down based on the 7-year trading range height, which will take them to the year 2000 low. Bulls want a failed breakout below the trading range and hope that the 10-week trading range is the final flag of the whole move down since 2021.

EURUSD Forex market

The Weekly EURUSD chart

EURUSD Bear Breakout on Weekly Chart below 2017 Low, Wedge Bottom
  • This week’s candlestick on the weekly EURUSD Forex chart was a big bear breakout bar with a long tail below. It was a breakout below the 7-year trading range.
  • Last week, we said that traders still need more information, therefore more bars. Traders will continue to BLSH (Buy Low, Sell High) until there is a strong breakout from the 10-week trading range.
  • Bears wanted a retest of the 2017 low followed by a strong breakout and a measured move down based on the height of the 7-year trading range. They got the breakout this week.
  • A measured move down based on the height of the 7-year trading range will take them to the year 2000 low.
  • If the bears get at least 2 strong bear bars closing below the 2017 low, odds of a breakout and a measured move increase. 
  • That means, if the bears get another follow-through bear bar next week, especially on that closes near the low, odds of more sideways to down increases.
  • The bulls hope the sell-off since March was a sell vacuum test of the 7-year trading range low. 
  • The bulls want a reversal higher from a wedge bottom (Mar 4, May 13 and July 8).
  • However, they have not been able to create sustained follow-through buying.
  • The bulls hope that the 10-week trading range is the final flag of the move down which started in 2021. They want a failed breakout below the 7-year trading range.
  • The move down is in a tight bear channel. That means strong bears. 
  • Next week will be an important week as traders will see whether the bears can create follow-through selling.
  • Since this was a big bear bar, it is a sell signal bar for next week. However, the long tail below makes it a weaker sell signal bar. Odds slightly favor sideways to down.
  • However, if next week is a bull bar, especially if it has a big bull body and closes near the high, odds of a failed breakout below the 7-year trading range and a reversal higher from a potential final flag increase.

The Daily EURUSD chart

EURUSD Forex Daily Chart Bear Breakout below 2017 Low, Final Flag Possibly
  • The EURUSD broke below the 10-week trading range on Tuesday with follow-through selling on Wednesday and Thursday.
  • Friday traded lower but reversed up to close as a bull reversal bar with a long tail below.
  • Previously, we said should the EURUSD continue to stall around or below the May high or around the 20-day exponential moving average, odds are the bears will return to sell the double top bear flag or lower high. 
  • The EURUSD stalled at the 20-day exponential moving average and the bears sold the wedge bear flag (June 16, June 22 and June 27) and got the bear breakout they wanted.
  • The bears want a measured move down based on the height of the 7-year trading range. That would take them to the year 2000 low.
  • The move down this week was strong enough for traders to expect at least a small second leg sideways to up.
  • There is a 10-bar bear micro channel which means strong bears.
  • The bulls hope that the 10-week trading range is the final flag of the move down since 2021.
  • They want a failed breakout below the 7-year trading range and a reversal higher from a wedge bear flag (Mar 4, May 13 and July 8).
  • Friday was a bull reversal bar, but it had a small bull body. It is a High 1 buy signal bar for Monday. However, it followed a 10-bar bear micro channel. It is a less reliable buy signal bar.
  • The bull will need at least a micro double bottom or a stronger bull reversal bar, one with a bigger bull body closing near the high before they would be willing to buy aggressively.
  • If the bulls start getting consecutive bull bars closing near their highs, the odds of a failed breakout increase.
  • For now, odds slightly favor at least a small second leg sideways to down after a pullback.

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