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EURUSD Is Stalling

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Market Overview: EURUSD Forex

The EURUSD is stalling around the bull trend line on the weekly chart. The bears see the last two weeks simply as a pullback and want another leg down to retest the April low. The bulls want a reversal from a higher low major trend reversal and a wedge bull flag (Feb 14, Apr 16, and Jun 26).

EURUSD Forex market

The Monthly EURUSD chart

EURUSD Monthly: No FT Buying, Middle of TR, Triangle, TTR
  • The June monthly EURUSD candlestick was a bear bar with a small tail below and closing below the 20-month EMA.
  • Last month, we said that the odds slightly favor June to trade at least a little higher and traders will see if the bulls can create a follow-through bull bar (even if it is only a bull doji).
  • The market traded slightly higher early in the month but lacked follow-through buying and reversed lower for the rest of the month.
  • The bulls want a reversal from a large wedge bull flag (Mar 15, Oct 3, and Apr 16).
  • They hope to get another leg up to retest the December 28 high.
  • They see the move down to April 16 low simply as a two-legged pullback.
  • However, they were not able to create a follow-through bull bar in June which indicates that they are not yet as strong as they hoped to be.
  • They must create a strong breakout above the triangle with sustained follow-through buying to convince traders that they are back in control.
  • They hope that the bull trend line and the 20-month EMA will act as support.
  • The bears see the prior move up (Dec 28) as a retest of the July high and got a reversal from a lower high major trend reversal.
  • They got a two-legged move trading below the 20-month EMA in April but lacked follow-through selling.
  • They see May and June as a pullback and want a retest of the April low followed by a breakout below the triangle.
  • They hope that the 20-month EMA and the bear trend line will act as resistance.
  • Since June is a bear bar closing near its low, it is a sell signal bar for July.
  • Traders will see if the bears can create a breakout below the triangle and a follow-through bear bar following June’s close below the 20-month EMA.
  • The market trades around the 20-month EMA, which is the middle of the trading range. It is an area of balance.
  • The last 3 candlesticks are also overlapping which means that the market is in a tight trading range.
  • The odds for the bulls and bears remain quite equal.
  • Poor follow-through and reversals are hallmarks of a trading range.
  • Traders will BLSH (Buy Low, Sell High) until there is a breakout with sustained follow-through buying/selling from either direction.

The Weekly EURUSD chart

EURUSD Weekly: Stalling at Trendline, EURUSD Is Stalling
  • This week’s candlestick on the weekly EURUSD Forex chart was a bull bar closing slightly above the middle of its range.
  • Last week, we said that the odds slightly favor the market to still be in the sideways to down phase and that the lower third of the smaller trading range can be the buy zone of trading range traders.
  • The market traded slightly below last week’s low but lacked follow-through selling.
  • The bears see the move up to June 4 simply as a deep pullback and want a small retest of the April 16 low (even if it forms 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 last two weeks simply as a pullback and want another leg down to retest the April low.
  • The bears need to create a strong breakout below the triangle with follow-through selling to increase the odds of retesting October 2023 low.
  • If the market trades higher, the bears want the minor bear trend line or the 20-week EMA to act as resistance.
  • The bulls want the bull trend line to act as support. So far this is the case.
  • They want 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.
  • If the market trades lower, they want a failed breakout below the bull trend line and a reversal from a double bottom with the April low.
  • Since this week is a bull bar closing above the middle of its range, it is a buy signal bar for next week albeit weaker (long tail above).
  • Traders will see if the bulls can create a follow-through bull bar testing the 20-week EMA or will the bears be able to 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 bull trend line can be a possible support area.
  • The EURUSD is in an 84-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.

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