Market Overview: EURUSD Forex
The EURUSD Forex February monthly candlestick was a EURUSD bear reversal bar. The bears want this to be the start of the deeper pullback. Odds slightly favor the 6-bar bull micro channel streak to end soon. The bulls want any pullback to be shallow and sideways. If they get that, the odds of another strong leg up increase. At least a small second leg sideways to up from a higher low major trend reversal.
EURUSD Forex market
The Monthly EURUSD Forex chart
- The February monthly EURUSD candlestick was a bear reversal bar closing near its low with a long tail above.
- Last month, we said that 4 consecutive bull bars on the monthly chart represent climactic behaviour and odds of a bear bar appearing within the next 1-3 months increase.
- February traded above January high but reversed to close below the 20-month exponential moving average.
- The bulls failed to get sustained follow-through buying after closing above the 20-month exponential moving average.
- They have a 6-bar bull micro channel. That means persistent buying. The market may have flipped into Always In Long.
- With February closing near its low, odds slightly favor the bull micro channel streak to end soon.
- Often, there are buyers below the first pullback from such a strong bull microchannel.
- The bulls want any pullback to be shallow and sideways. If they get that, the odds of another strong leg up increase.
- If there is a deeper pullback, the bulls want at least a small second leg sideways to up from a higher low major trend reversal.
- The bears want a reversal down from a lower high around the 20-month exponential moving average.
- Because of the strong move-up, the bears will need at least a strong reversal bar or a micro double top before they would be more willing to sell aggressively.
- February was a good reversal bar. The bears will need to create follow-through selling in March to increase the odds of a deeper pullback.
- For now, odds slightly favor the EURUSD to trade at least a little below the February low.
- Traders will see if the bears can get a strong follow-through bear bar or will the EURUSD trade slightly lower but close with a bull body or a long tail below.
The Weekly EURUSD chart
- This week’s candlestick on the weekly EURUSD Forex chart was almost a bull bar closing above the middle of the range with a prominent tail above.
- Last week, we said that odds slightly favor the EURUSD to trade at least a little lower and traders will see if the bears can create strong bear bars closing below the 20-week exponential moving average or will the EURUSD trade sideways and stall around the January 6 low.
- This week was mostly overlapping last week’s range and is stalling around the 20-week exponential moving average.
- The bears recently got another leg down testing the 20-week exponential moving average from a wedge top (Nov 15, Dec 5 and Feb 2).
- They want a 2-legged sideways-to-down pullback lasting at least a few weeks. So far, the pullback has lasted 5 weeks.
- The next targets for the bears are the January 6 low and the November 21 low which is the start of the bull channel.
- The bears need to create consecutive bear bars trading far below the 20-week exponential moving average to convince traders that a retest of the September low is underway.
- The bulls got a strong spike and channel up from September 2022 and the market may have flipped into Always In Long.
- The strong move up increases the odds of at least a small second leg sideways to up after a deeper pullback.
- They hope to get a reversal up from a double bottom bull flag with January 6 low.
- They want the 20-week exponential moving average to act as support.
- Since this week was a bull bar closing above the middle of the bar, it is a buy signal bar for next week.
- The bulls need to create a follow-through bull bar to increase the odds of a retest of the February 2 high.
- If the EURUSD trades lower next week, they want it to reverse up to close with a bull body or a long tail below.
- For now, traders will see if the bears can get a strong break below the 20-week exponential moving average or will the bulls get a follow-through bull bar.
- Odds slightly favor the bulls to get at least a small second leg sideways to up to retest February high after the pullback is over.
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