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EURUSD Bull Leg in Trading Range

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Market Overview: EURUSD Forex

EURUSD bull leg currently forming in a trading range. Traders will BLSH (Buy Low, Sell High) within a trading range until there is a strong breakout from either direction with follow-through buying/selling. The bulls want a strong breakout above the February high. The bears want a reversal lower from a double top with the February high. 

EURUSD Forex market

The Weekly EURUSD chart

EURUSD Bull Leg, Double Top, Retest February High on Weekly Chart
  • This week’s candlestick on the weekly EURUSD Forex chart was a bull bar with a prominent tail above.
  • Last week, we said that traders will see if the bulls can create a strong breakout above the inside bar or will the EURUSD trade slightly higher but fail and close as a bear bar or with a long tail above.
  • The bulls got a breakout above the inside bar, but the EURUSD closed below the prior 2 candlesticks’ high.
  • Previously, they got a strong spike and channel up from September 2022 and the market may have flipped into Always In Long. 
  • After a pullback, they got a small second leg sideways to up retesting near February high from a double bottom bull flag (Jan 6 and Mar 15).
  • The move up since March 15 is in a tight bull channel and the bulls have a 5-bar bull micro channel. 
  • However, the candlesticks have a lot of overlapping price action and the last 3, also candlesticks, have prominent tails above.
  • The bulls want a strong breakout above February 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 bears want a reversal down from a lower high major trend reversal. They see a micro wedge (Mar 23, Mar 30, and Apr 4) forming.
  • They want a failed breakout from the inside bar 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.
  • They will need to create a strong sell signal bar before traders will be willing to sell more aggressively.
  • For now, traders will see if the bulls can get a follow-through bull bar following this week’s breakout above the inside bar.
  • EURUSD is in a trading range between 1.1 and 1.05. Traders will BLSH (Buy Low, Sell High) within a trading range.
  • Until there is a strong breakout from either direction with follow-through buying/selling, the current leg could simply be a bull leg within a trading range.

The Daily EURUSD chart

EURUSD Daily: Wedge, Larger Double Top MTR
  • The EURUSD traded higher earlier in the week followed by a sideways to down pullback from Wednesday onwards. 
  • Previously, we said that it may be slightly more helpful to see the current move up from March 15 low as a bull leg within a trading range, which will be followed by a bear leg thereafter.
  • The bulls got a strong spike & channel up from October.
  • The move up was strong enough to have flipped the market into Always In Long. 
  • They then got a larger second leg sideways to up from a double bottom bull flag with January 6 low. 
  • The move-up has a lot of overlapping candlesticks but also in a tight bull channel. 
  • The bulls may still get a small second leg sideways to up after a small pullback.
  • They want a breakout above the February high and another strong leg up.
  • The bears see the move up since September as a 50% pullback of the selloff which started in May 2021.
  • They want a reversal down from a lower high major trend reversal or a double top bear flag (with Feb high).
  • They see a wedge bear flag (Mar 15, Mar 23, and April 4) forming.
  • The problem with the bear’s case is that they have not been able to create strong follow-through selling since March 15.
  • The bears need to create consecutive bear bars closing near their lows to convince traders of a deeper pullback.
  • Since the EURUSD is in a trading range between 1.1 and 1.05, traders will BLSH (Buy Low, Sell High) until there is a strong breakout from either direction.
  • It may be slightly more helpful to see the current move up from March 15 low as a bull leg within a trading range, until there is a strong breakout above February high with follow-through buying.
  • For now, odds slightly favor the EURUSD to trade at least a little higher.
  • Traders will see if the bulls get a retest and breakout above February high or will the EURUSD trade slightly higher but forms a strong sell signal bar with follow-through selling.

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