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EURUSD Breakout Below

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Market Overview: EURUSD Forex

The weekly chart formed a EURUSD breakout below the triangle pattern and the small trading range. The bears need to create follow-through selling next week to increase the odds of a retest of the larger trading range low (October low). The bulls want a reversal from a higher low major trend reversal and a larger wedge bull flag (Mar 15, Oct 3, and Apr 12).

EURUSD Forex market

The Weekly EURUSD chart

EURUSD Weekly: Stall at 20-Week EMA, BO below Triangle, EURUSD breakout below
  • This week’s candlestick on the weekly EURUSD Forex chart was a big outside bear bar closing near its low.
  • Last week, we said that traders would see if the bulls can create a follow-through bull bar or will the market continue to stall around the 20-week EMA area. Poor follow-through and reversals are hallmarks of a trading range.
  • This week traded above last week’s high but reversed back below the 20-week EMA. The market broke out below the triangle pattern.
  • Previously, the bears got a reversal from a wedge bear flag (Nov 3, Nov 29, and Dec 28) and a lower high major trend reversal (Dec 28).
  • They then got another leg down from a lower high major trend reversal (Mar 8).
  • They hope that last week was simply a pullback and hope to get at least a small second leg sideways to down. They got what they wanted.
  • Since this week was a breakout below the triangle pattern and the smaller 22-week trading range, the bears need to create a follow-through bear bar to increase the odds of a successful breakout.
  • The bulls got a 2-legged sideways to up pullback (Mar 8) from a double bottom bull flag (Dec 8 and Feb 14).
  • They see the current move simply as a bear leg within a trading range and want a reversal from around the low of the large trading range.
  • They want a reversal from a higher low major trend reversal and a larger wedge bull flag (Mar 15, Oct 3, and Apr 12).
  • Since this week’s candlestick is an outside bear bar closing near its low, it is a sell signal bar for next week.
  • Odds slightly favor the market to trade at least a little lower. The bear leg to retest near the low of the large trading range may be underway.
  • Traders will see if the bears can create a follow-through bear bar. If they do, it will increase the odds of a retest of the October 2023 low.
  • The EURUSD is in a 73-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: Strong BO below Triangle, Bears need FT
  • The EURUSD traded higher earlier in the week, but the follow-through buying was weak. The market then reversed below the 20-day EMA and broke out below the smaller 22-week trading range.
  • Last week, we said that traders would see if the bulls could create follow-through buying following last week’s close above the 20-day EMA. Poor follow-through and reversals are hallmarks of a trading range.
  • The bulls hope that the breakout from the triangle and the smaller trading range will fail.
  • They hope that the current move will form a higher low major trend reversal and reverse from around the lower third of the large trading range (around the October low area).
  • The problem with the bull’s case is that the bears are getting strong consecutive bear bars closing near their lows.
  • They will need to create a few strong consecutive bull bars to indicate that they are at least temporarily back in control.
  • The bears see the recent move (to Mar 8) simply as a two-legged pullback and a buy vacuum test of the small trading range high area.
  • They got a reversal from a lower high major trend reversal (Mar 8) and a double top bear flag (Jan 11 and Mar 8).
  • They want a strong breakout below the February low and a retest of the October low (larger trading range low). 
  • Traders will see if the bears can create a follow-through selling next week. The move down is strong enough to favor at least a small second leg sideways to down after a small pullback.
  • For now, odds slightly favor the market to trade at least a little lower and favor at least a small second leg sideways to down after a small pullback.
  • The bear leg to retest the large trading range low (October low) could be underway.
  • Traders will continue to BLSH (Buy Low, Sell High) within a trading range until there is a breakout with follow-through selling/buying.

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