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Weekly EURUSD Wedge

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Market Overview: EURUSD Forex

The market formed a weekly EURUSD wedge bull flag (Feb 14, Apr 16, and Jun 26). The bulls need to create follow-through buying next week (even if it is only a bull doji). The bears see the current move simply as a pullback forming a lower high and want another leg down to retest the recent leg low (Jun 26).

EURUSD Forex market

The Weekly EURUSD chart

EURUSD Weekly: Wedge Bull Flag, Triangle, Weekly EURUSD Wedge
  • This week’s candlestick on the weekly EURUSD Forex chart was a bull bar closing near its high and above the 20-week EMA.
  • Last week, we said that traders would see if the bulls can create a follow-through bull bar testing the 20-week EMA or if the bears can create a breakout below the triangle. The EURUSD is trading near the lower third of the smaller trading range which can be the buy zone of trading range traders.
  • The bears see the move up to June 4 simply as a deep pullback and got a retest of the April 16 low forming 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 see the current move simply as a pullback forming a lower high and want another leg down to retest the recent leg low (Jun 26).
  • The bears need to create a strong breakout below the triangle with follow-through selling to increase the odds of retesting October 2023 low. So far, they have not yet been able to do so.
  • If the market trades higher, the bears want the 20-week EMA or the bear trend line to act as resistance.
  • The bulls want the bull trend line to act as support. So far this is the case.
  • They got a reversal from a higher low major trend reversal and a wedge bull flag (Feb 14, Apr 16, and Jun 26).
  • They need to create consecutive bull bars closing above the 20-week EMA to show that they are back in control.
  • That means they need to create follow-through buying next week (even if it is only a bull doji).
  • They need to create a breakout above the triangle with follow-through buying to increase the odds of a retest of the trading range high (Dec 28).
  • Since this week is a bull bar closing near its high, it is a buy signal bar for next week.
  • Odds slightly favor the market to trade at least a little higher.
  • Traders will see if the bulls can create a follow-through bull bar trading the 20-week EMA or will the market trade slightly higher but stall and close with a long tail above or a bear body.
  • The EURUSD is trading around the middle of the trading range which is an area of balance.
  • The EURUSD is in an 85-week trading range. (Trading range high: July 2023, Trading range low: Oct 2023). 
  • Poor follow-through and reversals are hallmarks of a trading range.
  • Traders will continue to BLSH (Buy Low, Sell High) within a trading range until there is a breakout with follow-through selling/buying.

The Daily EURUSD chart

EURUSD Daily: Bull Leg, Tight Bull Channel
  • The EURUSD traded sideways to up for the week with consecutive bull bars trading above the 20-day EMA.
  • Previously, we said that traders would see if the bears could continue to create follow-through selling. The market was trading around the lower third of the smaller trading range which can be the buy zone of trading range traders.
  • The bulls got a reversal from a higher low major trend reversal and a wedge bull flag (Feb 14, Apr 16, and Jun 26).
  • They managed to get follow-through buying trading above the 20-day EMA.
  • They see the recent move to the June 26 low simply as a pullback and a retest of the prior low (Apr 16).
  • They want a retest of the June high followed by a breakout.
  • If there is a pullback, they want at least a small second leg sideways to up to retest the current leg extreme high (now Jul 5).
  • Previously, 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 got another leg down completing the larger wedge pattern (Feb 14, Apr 16, and Jun 26).
  • The third leg down formed a higher low which indicates that the bears are not as strong as they hoped to be.
  • They see the current move simply as a pullback forming a lower high.
  • They see a larger wedge bear flag forming (Mar 8, Jun 4 and the still developing third leg Jul 5).
  • They want the bear trend line to act as resistance and want the market to reverse below the 20-day EMA.
  • The market has traded back to around the middle of the trading range which is an area of balance.
  • For now, traders will see if the bulls can continue to create follow-through buying.
  • Or will the market stall around the bear trend line area and reverse back below the 20-day EMA?
  • The current move up is strong enough for traders to expect at least a small second leg sideways to up after a small pullback.
  • The market is forming a contracting triangle with lower highs and higher lows. The market is in breakout mode.
  • 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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