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EURUSD OO Pattern but Dojis

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Market Overview: EURUSD Forex

The EURUSD Forex weekly chart formed an EURUSD OO pattern above the 20-week exponential moving average. So far, the bears have not yet been able to create follow-through selling below the 20-week EMA. The bulls want a second leg sideways to up but so far, have not yet been able to create consecutive bull bars.

EURUSD Forex market

The Weekly EURUSD chart

EURUSD OO pattern, TR, Stall at 20-Week EMA on Weekly Chart
  • This week’s candlestick on the weekly EURUSD Forex chart was a consecutive outside doji closing above the middle of its range.
  • Last week, we said that traders will see if the bears can get a strong break below the 20-week EMA or will the bulls get a follow-through bull bar.
  • This week traded below the 20-week exponential moving average but reversed to close above it again, forming an OO (outside-outside) pattern,
  • The last 4 candlesticks are mostly overlapping and stalling above the 20-week exponential moving average.
  • The bears got a reversal down testing the 20-week exponential moving average from a wedge top (Nov 15, Dec 5 and Feb 2).
  • They want a second leg sideways to down from a lower high major trend reversal (Mar 15).
  • The next targets for the bears are the January 6 low and the November 21 low. 
  • 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.
  • If the bears do not create strong follow-through selling below the 20-week exponential moving average within a few weeks, the market will likely do the opposite and attempt to retest February high instead. This remains true.
  • If the EURUSD trades higher, they want a reversal down from a lower high major trend reversal or a double top with the February high.
  • 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 the current pullback. 
  • So far, the second leg sideways to up is weak with overlapping candlesticks.
  • They hope to get a reversal up from a double bottom bull flag with January 6 low. They will need to create strong consecutive bull bars closing near their highs to convince traders that a retest of the February high is underway.
  • The bulls want the 20-week exponential moving average to remain as support.
  • They need to create strong consecutive bull bars closing near their highs to increase the odds of a retest of the February 2 high.
  • If the EURUSD trades lower, the bulls want a reversal up from a higher low major trend reversal.
  • An OO (outside-outside) pattern means the EURUSD is in breakout mode. However, both candlesticks are dojis within a tight trading range. The EURUSD is in an area of balance.
  • Traders will wait for a breakout from either direction with follow-through price action for more clarity.
  • For now, traders will see if the 20-week exponential moving average continues to act as support or will the bears get a break below instead.

The Daily EURUSD chart

EURUSD Daily: Triangle, Trading Range, DT Bear Flag
  • The EURUSD continue to trade sideways around the 20-day exponential moving average forming a small expanding triangle.
  • Last week, we said that traders will see if the bears can create strong follow-through selling breaking far below the 3-week trading range and if they continue failing to do so, odds will swing in favor of a retest of the February high within a couple of weeks.
  • This week broke above and below the trading range with no follow-through price action.
  • The bears see the move up since September as a 50% pullback of the selloff which started in May 2021.
  • They got a pullback testing January 6 low from a wedge top. They want a second leg sideways to down from a lower high major trend reversal (Mar 15) and a double top bear flag (Mar 7 and Mar 15).
  • The next targets for the bears are the January 6 low and the November 21 low which was the start of the bull channel.
  • The bears need to create consecutive bear bars closing near their lows trading far below the January 6 low and November 21 low to convince traders that a retest of the September low could be underway.
  • The bulls got a strong spike & channel up from October.
  • The move up was strong enough to have flipped the market into Always In Long. 
  • The bulls want a larger second leg sideways to up to retest February high from a higher low major trend reversal and a double bottom bull flag with January 6 low.
  • So far, the second leg sideways to up is weak with a lot of overlapping candlesticks.
  • The bulls need to create consecutive bull bars closing near their highs breaking far above the March 15 high to increase the odds of a retest of the February high.
  • The EURUSD formed a small expanding triangle around the 20-day exponential moving average which is a breakout mode pattern.
  • Traders will wait for a breakout from either direction with follow-through price action for more clarity.
  • If the bears continue to fail to break below January 6 low, odds will swing in favor of a retest of the February high within a couple of weeks.

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