Market Overview: EURUSD Forex
The market traded higher but reversed into a bear bar; there was no EURUSD follow-through buying following last week’s bull reversal bar. That put the minor pullback lasting many weeks beginning in doubt. If the bears get follow-through selling breaking far below the March low, it could lead to a measured move down. The bulls hope that the market is simply retesting the October 3 low and want a reversal from a small double bottom.
EURUSD Forex market
The Weekly EURUSD chart
- This week’s candlestick on the weekly EURUSD Forex chart was a bear reversal bar with a long tail above.
- Last week, we said that the odds slightly favor the EURUSD to trade at least a little higher and begin the pullback phase.
- This week traded higher but reversed into a bear bar closing near its low.
- The bulls hope that the strong move down is simply a sell vacuum within a trading range.
- They want a reversal up from a double bottom bull flag (with Mar 15) and a parabolic wedge (Aug 3, Aug 25, and Oct 3).
- The problem with the bull’s case is that the move down is very strong and they failed to get follow-through buying this week. That puts the pullback phase beginning into doubt.
- The bulls need to do more to prove that they are at least temporarily back in control by creating consecutive bull bars closing near their highs (follow-through buying) for the next few weeks.
- The bears got a tight bear channel testing the trading range low.
- That increases the odds of at least a small second leg sideways to down after a larger pullback (bounce).
- They see this week as a 1-bar pullback and want the market to resume lower by breaking below the March low with follow-through selling.
- Since this week was a bear bar closing near its low, it is a sell signal bar for next week.
- Odds slightly favor the market to trade at least a little lower.
- Until the bulls can show they are back in control by creating strong bull bars, odds continue to slightly favor the EURUSD to trade sideways to down.
The Daily EURUSD chart
- The EURUSD traded higher first half of the week but reversed lower on Thursday and Friday.
- Last week, we said that a minor pullback may have begun. Traders will see if the bulls can start creating more buying pressure or will the pullback attempt be weak and sideways.
- This week tested the 20-day EMA, but the bulls were not able to get sustained follow-through buying above it.
- The bulls hope that the strong move down is simply a sell vacuum test of the 44-week trading range low.
- They want a larger pullback from a parabolic wedge (Aug 25, Sept 14, and Oct 3) and a large double bottom with the March low.
- They hope that this week is simply a retest of the Oct 3 low and want a reversal from a higher low major trend reversal or a small double bottom (Oct 3).
- They need to create consecutive bull bars closing near their highs, breaking far above the 20-day EMA and the bear trend line to increase the odds of the bull leg beginning.
- The bears got a tight bear channel down lasting 13 weeks.
- They want a strong breakout below the March low and a measured move down based on the height of the 44-week trading range.
- The move down since July 18 is in a tight bear channel. That increases the odds of at least a small second leg sideways to down after a larger pullback.
- If the market trades slightly higher, the bears want a reversal from a double top bear flag with the October 12 high.
- Since Friday was a bear bar closing in the lower half, it is a sell signal bar for Monday.
- The minor pullback (bounce) recently has also alleviated the oversold conditions.
- Until the bulls can break far above the bear trend line, odds slightly favor the EURUSD to trade sideways to down still.
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