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EURUSD Inside Doji Bar, Tight Bull Channel

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Market Overview: EURUSD Forex

EURUSD inside doji bar and tight bull channel formed on weekly chart which means strong bulls. The bulls want a strong breakout above the February 2 high and another strong leg up. If there is a pullback, odds slightly favor buyers below the first pullback from such a strong bull micro channel. The bears want a minor pullback from the wedge (Mar 7, Mar 23, and Apr 14) and a micro wedge (Mar 23, Apr 4, and Apr 14) pattern.

EURUSD Forex market

The Weekly EURUSD chart

EURUSD Inside Doji Bar, Tight Bull Channel, and 6-Bar Bull Micro channel on weekly chart.
  • This week’s candlestick on the weekly EURUSD Forex chart was almost a perfect EURUSD inside doji bar with a prominent tail below.
  • Last week, we said that odds slightly favor at least a small second leg sideways to up as there are usually buyers below the first pullback from such a strong bull micro channel.
  • The move up since March 15 is in a tight bull channel and the bulls have a 6-bar bull micro channel. That means strong bulls.
  • The bulls want a strong breakout above February 2 high and another strong leg up, possibly retesting February 2022 highs.
  • For that, they need to create follow-through buying breaking far above the February 2 high.
  • The current move up is strong enough for traders to expect at least a small second leg sideways to up after a pullback.
  • The bears want a reversal down from a higher high major trend reversal. They see a wedge (Mar 7, Mar 23, and Apr 14) and a micro wedge (Mar 23, Apr 4, and Apr 14).
  • They want a failed breakout above the February 2 high and a retest of the March 15 low. 
  • The problem with the bear’s case is that the current move-up is in a tight bull channel and they have not been able to create any strong bear bars.
  • The bears hope that the strong move up is simply a buy vacuum retest of the February 2 high.
  • They will need to create a strong reversal bar or a micro double top before traders will be willing to sell more aggressively.
  • Since this week is an inside doji bar, the EURUSD is in a breakout mode. 
  • The bulls want a breakout above this week’s high while the bears want a breakout below this week’s low.
  • The first breakout from an inside bar can fail 50% of the time.
  • The wedge and micro wedge increase the odds that we may see a minor pullback begin at any moment. 
  • If there is a pullback, odds slightly favor buyers below the first pullback from such a strong bull micro channel.
  • EURUSD is in a trading range between 1.1 and 1.05. Traders will BLSH (Buy Low, Sell High) within the trading range.
  • Until there is a strong breakout above with follow-through buying, the current leg could simply be a bull leg within a trading range.

The Daily EURUSD chart

EURUSD Daily: Wedge, Higher High MTR, but Tight Channel
  • The EURUSD traded lower on Monday followed by a sideways trading range.
  • Last week, we said that the bears need to create follow-through selling early this week to increase the odds of a deeper pullback.
  • The bears got follow-through selling on Monday but failed to get sustained selling for the rest of the week.
  • They want a reversal down from a higher high major trend reversal (with Feb high) and a wedge pattern (Mar 23, April 4, and April 14).
  • The problem with the bear’s case is that they have not been able to create sustained follow-through selling since March 15.
  • The bears need to create consecutive bear bars closing near their lows breaking the bull trend line.
  • The wedge bear flag near the top of the trading range increases the odds of a pullback which can begin at any moment.
  • If the EURUSD trades higher, they want it to reverse down from a small double top with April 14 high.
  • The bulls got a larger second leg sideways to up from a double bottom bull flag with January 6 low. 
  • The move-up is in a tight bull channel. That means strong bulls.
  • They want a breakout above the February 2 high and another strong leg up.
  • If there is a pullback, the bulls want a larger second leg sideways to up retesting April 15 high.
  • For now, traders will see if the bears can create more selling pressure by breaking far below the 20-day exponential moving average.
  • If the current pullback remains sideways with overlapping candlesticks, the odds will favor another leg up after that.
  • Until the bears can create strong consecutive bear bars, odds continue to slightly favor sideways to up after a moderate pullback.

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