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EURUSD sideways trading range for 9 weeks

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Market Overview: EURUSD Forex

EURUSD sideways trading range for 9 weeks. The bulls want a reversal from a double bottom (May 13 and Jun 15) following a trend channel line overshoot and a wedge bottom (Aug 20, Nov 24 and May 13). They need to create follow-through buying next week to convince traders that a reversal higher may be underway. The bears want the EURUSD to stall around or below the May 30 high, the bear trend line, or the 20-week exponential moving average and a retest of the low.

EURUSD Forex market

The Weekly EURUSD chart

EURUSD Forex Weekly Chart Sideways Pullback in 9-Week trading Range
  • This week’s candlestick on the weekly EURUSD Forex chart was a bull bar with a prominent tail above. This week traded above last week’s high but closed below it.
  • Last week, we said that the EURUSD would likely need to trade sideways for a couple more weeks for traders to get more clarity.
  • This week was sideways overlapping last week’s range.
  • The bears want a retest of the 2017 low followed by a strong breakout and a measured move down based on the height of the 7-year trading range.
  • While the bears got follow-through selling last week, the bear doji indicates that the bears are not as strong as they could have been.
  • The bears hope that this week was simply a pullback and want at least a small second leg sideways to down, retesting the May low.
  • They want the EURUSD to stall around or below the May 30 high, the bear trend line, or the 20-week exponential moving average.
  • The bulls hope that the sell-off since March was a sell vacuum test of the 7-year trading range low. They want at least a 2-legged sideways to up pullback. 
  • While this week traded above last week’s high, the prominent tail above indicates that the bulls are not as strong as they could have been.
  • The bulls want a reversal higher from a double bottom (May 13 and Jun 15) following a trend channel line overshoot and a wedge bottom (Aug 20, Nov 24 and May 13).
  • The first targets for the bulls are the May 30 major lower high and the 20-week exponential moving average.  
  • They need to create consecutive bull bars closing near the highs trading far above the May 30 high to convince traders that a reversal higher may be underway.
  • For next week, they need to create a follow-through bull bar to increase the odds of a 2 legged sideways to up pullback. 
  • Al has said that the market has been in a trading range for seven years. Reversals are more likely than breakouts and a measured move down. This remains true.
  • Therefore, as strong as the sell-off has been, it is still more likely a bear leg in the seven-year trading range than a resumption of the 15-year bear trend.
  • For now, traders still need more information, therefore more bars. The EURUSD would likely need to trade sideways for a couple more weeks for traders to get more clarity.
  • The EURUSD is trading slightly below the middle of the 9-week trading range. Traders will continue to BLSH (Buy Low, Sell High) within the trading range until there is a strong breakout from either direction.

The Daily EURUSD chart

EURUSD Forex Daily Chart 2-legged Pullback Stalls at 20-EMA
  • The EURUSD traded sideways to up for the week in a tight trading range. Thursday and Friday formed an ii pattern, which is breakout mode.
  • Last week, we said that while the context slightly favor sideways to up pullback, the bulls will need to create consecutive bull bars closing near the highs to convince traders that a deeper pullback may be underway.
  • If the pullback is more sideways and stalls around or below May high or around the 20-day exponential moving average, odds are the bears will return to sell the double top bear flag or lower high.
  • This week traded sideways to up, but is stalling just below the 20-day exponential moving average.
  • The bears want a second leg sideways to down to re-test the low followed by a breakout and a measured move down based on the height of the 7-year trading range.
  • They see the last one and a half weeks simply as a double top bear flag pullback (Jun 16 and Jun 22) and want at least a small second leg sideways to down retest of the low.
  • We have said that if the EURUSD continue to stall around or below May high or around the 20-day exponential moving average, odds are the bears will return to sell the double top bear flag or lower high. This remains true.
  • The bulls want a reversal higher from a double bottom (May 13 and Jun 15) higher low major trend reversal following a trend channel like overshoot and a wedge bottom (Jan 28, Mar 4 and May 13).
  • However, they have not yet been able to create strong consecutive bull bars closing near their highs.
  • While Thursday and Friday formed an ii pattern which is a breakout mode pattern, it is around the middle of the 9-week trading range. It is a less reliable breakout pattern.
  • Traders need more information, therefore more bars. The EURUSD may need to trade sideways for a couple more weeks until there is a strong breakout from either direction of the 9-weeks trading range.

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