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EURUSD Bears Need Follow-through

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Market Overview: EURUSD Forex

The EURUSD bears need follow-through selling following this week’s bear bar closing below the 20-week EMA. The bulls want a reversal from a higher low major trend reversal or a double bottom with the April low. The EURUSD is trading near the lower third of the smaller trading range which can be the buy zone of trading range traders.

EURUSD Forex market

The Weekly EURUSD chart

EURUSD Weekly: Test April Low, Bears Need FT Selling, EURUSD Bears Need Follow-through
  • This week’s candlestick on the weekly EURUSD Forex chart was a bear bar closing in its lower half with a prominent tail below.
  • Last week, we said that the bears would need to create a follow-through bear bar below the 20-week EMA to increase the odds of retesting the April 16 low.
  • The bears got what they wanted.
  • They see the move up to June 4 simply as a deep pullback and want a small retest of the April 16 low (even if it forms a higher low).
  • They got a reversal from a wedge bear flag (Apr 26, May 3, and May 16), a double top bear flag (Apr 9 and May 16) and a small double top (May 16 and Jun 4).
  • They hope to get another leg down completing the wedge pattern with the first two legs being February 14 and April 16. The third leg down is currently underway.
  • The bears need to create strong consecutive bear bars closing near their lows to increase the odds of retesting the October low.
  • Previously, the bulls had a tight bull channel but have only reached a lower high.
  • They hope that the last 2 weeks were simply a pullback. 
  • They want the bull trend line to act as support.
  • They want a reversal from a higher low major trend reversal or a double bottom with the April low.
  • Since this week is a bear bar closing in its lower half, it is a sell signal bar for next week.
  • Traders will see if the bears can create more follow-through selling, or if the market starts to stall around the current levels (around the bull trend line area).
  • For now, the odds slightly favor the market to still be in the sideways to down phase.
  • However, the EURUSD is trading near the lower third of the smaller trading range which can be the buy zone of trading range traders.
  • The bull trend line can be a possible support area.
  • The EURUSD is in an 82-week trading range. (Trading range high: July 2023, Trading range low: Oct 2023). 
  • Traders will continue to BLSH (Buy Low, Sell High) within a trading range until there is a breakout with follow-through selling/buying.
  • Poor follow-through and reversals are hallmarks of a trading range.

The Daily EURUSD chart

EURUSD Daily: Test April Low & Bull Trend Line
  • The EURUSD gapped down on Monday with some follow-through selling. Wednesday was a big pullback but had no follow-through buying. The market resumed lower for the rest of the week with Friday closing with a long tail below.
  • Last week, we said that traders will see if the bears can create sustained follow-through selling. If they do, the odds will swing in favor of a retest of the April 16 low.
  • The bulls see the current move simply as a deep pullback.
  • They want the market to stall around the current levels and form a reversal from a higher low major trend reversal.
  • If the market trades lower, they want the bull trend line to act as support.
  • The bears got a reversal from a wedge bear flag (Apr 26, May 3, and May 16) and a double top bear flag (Apr 9 and May 16).
  • They want another leg down completing the larger wedge pattern with the first two legs being February 14 and April 16.
  • At the least, they want a small retest of the April 16 low, even if it only forms a higher low. They got what they wanted.
  • The next target for the bears is the April 16 low.
  • If there is a pullback, they want the bear trend line or the 20-day EMA to act as resistance.
  • For now, traders will see if the bears can continue to create follow-through selling.
  • The market is trading around the lower third of the smaller trading range which can be the buy zone of trading range traders.
  • The bull trend line could also be a potential support area.
  • Traders will continue to BLSH (Buy Low, Sell High) within a trading range until there is a breakout with follow-through selling/buying.
  • Poor follow-through and reversals are hallmarks of a trading range.

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