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EURUSD H2 Buy Signal, Need Follow-through

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Market Overview: EURUSD Forex

The EURUSD Forex bulls triggered the H2 buy signal on the weekly chart. Next week, the bulls need to create a follow-through bull bar to increase the odds of higher prices. Bears hope that the current pullback is simply forming a double top bear flag with October 4 high. The bear trend line and 20-week exponential moving average are resistances above.

EURUSD Forex market

The Weekly EURUSD chart

EURUSD Weekly: Bulls Triggered H2 Buy Signal
  • This week’s candlestick on the weekly EURUSD Forex chart was a bull bar closing near the high.
  • Last week, we said that the EURUSD is forming a small trading range between 0.95 and 1.00. 
  • The bears want a strong breakout below the 2017 low, and a measured move down based on the height of the 7-year trading range. This will take them to the year 2000 low.
  • The move down is in a tight bear channel. That means strong bears. 
  • The bear trend has also lasted a long time and is climactic.
  • While the breakout below the July-August low in September was strong, the bears failed to get follow-through selling.
  • The bears hope the last few weeks were simply a pullback and want at least a retest of Sept low.
  • If next week trades higher, they want the EURUSD to stall and reverse lower again, forming a double top bear flag with October 4 high or around the bear trend line.
  • The bulls hope that the recent 10-week trading range (July to Sept) is the final flag of the move. 
  • They want a reversal higher from a wedge bottom (May 13, July 14 and Sept 28) and a trend channel line overshoot.
  • The bulls will need to create strong consecutive bull bars closing near their highs, breaking far above the bear trend line and 20-week exponential moving average, to convince traders that a larger sideways to up pullback may be underway.
  • The bulls triggered the second entry long (High 2) this week’s high and got a strong entry bar closing near its high. 
  • The bulls kept failing to get sustained follow-through buying, a recurring theme since the selloff started in 2021. 
  • Will they be able to get follow-through buying next week by closing as a strong consecutive bull bar? If they do, it could signal a potential change in the character of the market.
  • Since this week was a bull bar closing near the high, it is a good buy signal bar for next week.
  • Odds slightly favor the EURUSD to trade at least slightly above this week’s high.
  • The EURUSD is in a small trading range between 0.95 and 1.00. A trading range means an area of balance between the bulls and the bears.
  • Traders will BLSH (Buy Low, Sell High) until there is a breakout from either direction.
  • The 20-week exponential moving average and bear trend line remains resistances above.

The Daily EURUSD chart

EURUSD Daily: Higher Low MTR, 2nd Leg Up?
  • The EURUSD traded sideways to up for the week closing above the 20-day exponential moving average on Friday.
  • Last week, we said that the EURUSD is forming a trading range between 0.95 – 1.00 and traders will BLSH (Buy Low, Sell High) within this range until there is a strong breakout from either direction.
  • The bulls want a failed breakout below the 7-year trading range.
  • They hope that the recent 10-week trading range pullback (July to Sept) is the final flag of the move down which started in February. 
  • The bulls want a reversal higher from a wedge bottom (May 13, July 14 and Sept 28) and trend channel line overshoot following a sell climax.
  • However, they have not been able to create sustained follow-through buying, a recurring theme since 2021.
  • The bulls see the current pullback (October 13) simply as a retest of the September low and want a reversal higher from a higher low major trend reversal.
  • The bulls will need to create strong consecutive bull bars closing near their highs, breaking far above the 20-day exponential moving average and bear trend line, to convince traders that a larger 2-legged sideways to up pullback lasting many weeks may be underway.
  • At the very least, they want a small second leg sideways to up retesting of October 4 high.
  • The bears want a continuation down and a measured move down based on the height of the 7-year trading range. That would take them to the year 2000 low.
  • The bears want another leg lower retesting the Sept low followed by a strong breakout with follow-through selling. 
  • However, this week, they failed to create follow-through selling.
  • They hope that the current move is simply a pullback and want reversal lower from a double top bear flag (with October 4 high) to re-test the Sept low.
  • Since Friday was a bull bar closing near the high, it is a buy signal bar for Monday.
  • Odds favor the EURUSD to trade at least slightly higher next week.
  • The EURUSD is forming a trading range between 0.95 and 1.00. 
  • Traders will BLSH (Buy Low, Sell High) within this range until there is a strong breakout from either direction.
  • The bear trend line remains as resistance above.

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