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EURUSD Outside Bull Doji

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Market Overview: EURUSD Forex

The EURUSD Forex weekly candlestick was an outside bull doji. Bulls want a continuation of the bull channel up, while the bears want a test of the 20-week exponential moving average and the January 6 low. The bulls want any pullback to be sideways and not deep. If the pullback is weak and sideways, the odds of another strong leg-up increase. If the bears do not continue to create strong consecutive bear bars, odds will swing in favor of a retest of the February high.

EURUSD Forex market

The Weekly EURUSD chart

EURUSD Weekly: Outside Bull Doji
  • This week’s candlestick on the weekly EURUSD Forex chart was an outside bull doji with tails above and below.
  • Last week, we said that the odds slightly favor the EURUSD to trade at least a little lower.
  • This week traded below last week’s low but closed above it with a small bull body.
  • The bears want a 2-legged sideways-to-down pullback lasting at least a few weeks. 
  • They got a reversal lower from a wedge top (Nov 15, Dec 5 and Feb 2).
  • They hope that this week was simply a pullback and wants at least a small second leg sideways to down.
  • The first targets for the bears are the 20-week exponential moving average and the January 6 low.
  • If the EURUSD trades higher, they want a reversal lower 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 a deeper pullback. 
  • The bulls want any pullback to be sideways and not deep. If the pullback is weak and sideways, the odds of another strong leg-up increase.
  • They want weak bear bars with long tails below and dojis within the pullback phase.
  • They hope to get a continuation of the bull channel followed by a retest and breakout above the February high.
  • If the EURUSD trades lower, they hope to get a micro double bottom with February 17 or a double bottom bull flag with January 6 low.
  • Since this week was a doji bar, it is a neutral signal bar for next week.
  • The bears still need to prove they are strong enough to create a deeper pullback. 
  • If they do not continue to create strong consecutive bear bars, odds will swing in favor of a continuation of the bull channel up.
  • Traders will see if the bears can get another leg down reaching the 20-week exponential moving average, or will the EURUSD trade slightly lower and form a micro double bottom with February 17 low and reverse up.

The Daily EURUSD chart

EURUSD Daily: Weaker 2nd Leg Down
  • The EURUSD traded higher on Tuesday and was mostly sideways throughout the week. Friday traded lower but reversed into a bull reversal bar near its high.
  • Last week, we said that the odds slightly favor the EURUSD to still be in the sideways to down pullback phase to work off the overbought condition.
  • The bears see the move up since September as a 50% pullback of the selloff which started in May 2021.
  • They got a reversal lower from a wedge top (Nov 15, Dec 15, and Feb 2) and a micro wedge (Jan 13, Jan 26 and Feb 2).
  • So far, the bears have 2 legs down, with the second leg down this week weaker than the first.
  • The overlapping bars indicate the bears are not yet strong.
  • The next target for the bears is the January 6 low.
  • 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 bears need to create strong consecutive bear bars closing near their lows to increase the odds of lower prices.
  • The spike & tight channel up since October means strong bulls.
  • The odds slightly favor the market has flipped into Always In Long. 
  • The bulls want any pullback to be sideways and not deep. 
  • If there is a deep pullback, the bulls want a reversal up from a higher low major trend reversal, a double bottom bull flag with January 6 low and a larger second leg sideways to up.
  • At the very least, they want a retest of February high.
  • Since Friday was a bull reversal bar, it is a buy signal bar for Monday. The EURUSD may trade slightly higher early next week.
  • Until the bears can create strong consecutive bear bars closing near their lows, the bulls may still get a retest of the February high.

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