Market Overview: EURUSD Forex
The weekly chart formed a EURUSD follow-through bull bar following last week’s close above the 20-week EMA. The bulls want a retest and breakout above the trading range high (April/May highs). The bears want a reversal from a wedge bear flag (Oct 12, Nov 3, and Nov 21) and a lower high major trend reversal.
EURUSD Forex market
The Weekly EURUSD chart
- This week’s candlestick on the weekly EURUSD Forex chart was a bull bar with a prominent tail above and a long tail below.
- Last week, we said that the odds continue to slightly favor the market to still be in the sideways to up phase and traders will see if the bulls can get more follow-through buying or not.
- The bulls got a reversal up from a double bottom bull flag (Oct 3 and Jan 6) and a parabolic wedge (Aug 3, Aug 25, and Oct 3).
- This week was a follow-through bull bar following last week’s close above the 20-week EMA.
- The bulls want a retest of the trading range high.
- If the market trades slightly lower, the bulls want a reversal up from a higher low major trend reversal and the 20-week EMA to act as support.
- Previously, the bears got a tight bear channel testing the trading range low (Jan 6).
- They see the current move simply as a deep pullback and want the market to retest the October low.
- They want a reversal from a wedge bear flag (Oct 12, Nov 3, and Nov 21) and a lower high major trend reversal.
- The problem with the bear’s case is that they have not been able to create follow-through selling (since the Oct low).
- Since this week’s candlestick is a bull bar closing in its upper half, it is a buy signal bar for next week albeit weaker (small bull body and a prominent tail above).
- For now, odds continue to slightly favor the market to still be in the sideways to up phase and a small second leg sideways to up after a small pullback.
- Traders will see if the bulls can get more follow-through buying or will next week trade slightly higher but close with a long tail or a bear body.
- If the bulls can get a couple of consecutive bull bars closing near their high, it will increase the odds of a retest and subsequent breakout attempt above the trading range high.
The Daily EURUSD chart
- The EURUSD traded sideways to up this week. Friday closed as a bull bar near its high following the small pullback in midweek.
- Last week, we said that odds slightly favor the market to still be in the sideways to up phase even if there is a small pullback first.
- The bulls got a reversal from a parabolic wedge (Aug 25, Sept 14, and Oct 3) and a large double bottom with the January/March lows.
- They hope that the bull leg to retest the trading high (April/May highs) is now underway.
- If the market trades lower, they want a reversal up from a higher low major trend reversal and the 20-day EMA to act as support.
- The bears have not been able to create sustained follow-through selling since the October low.
- They see the current move simply as a deep pullback of the whole selloff from the July 18 high.
- They want a reversal down from a wedge bear flag (Oct 24, Nov 6, and Nov 21), a lower high major trend reversal and a double top bear flag (Aug 30 and Nov 21).
- If the market trades higher, they want a reversal from a small wedge top (with the first two legs being Nov 14 and Nov 21).
- They want the EURUSD to stall around or below the trading range high area (April/May highs).
- So far, the bears continue to fail creating sustained follow-through selling.
- The buying pressure since the November low looks stronger with larger bull bars and stronger follow-through buying.
- For now, odds slightly favor the market to still be in the sideways to up phase, even if there are some minor pullbacks in between.
- Traders will see if the bulls can create consecutive bull bars. If they do, the odds of retesting the trading range high and the subsequent breakout attempt will increase.
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