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EURUSD Overlapping Candlesticks

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Market Overview: EURUSD Forex

The EURUSD Forex monthly chart has 3 overlapping candlesticks. That means that the EURUSD is in a trading range. The bears failed to get follow-through selling in March. The bulls need to create a follow-through bull bar trading above the February high to increase the odds of another leg higher.

EURUSD Forex market

The Monthly EURUSD Forex chart

EURUSD Monthly: March Bull Bar, Overlapping Candlesticks
  • The March monthly EURUSD candlestick was a bull bar with a small tail above.
  • Last month, we said that odds slightly favor the EURUSD to trade at least a little below the February low and 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 EURUSD broke below the February low twice (Mar 8 and Mar 15) and at both times had no follow-through selling. The market then traded higher to close as a big bull bar.
  • The bears want a reversal down from a lower high around the 20-month exponential moving average.
  • However, they failed to create follow-through selling in March.
  • They hope that the current move is simply a retest of the February high and want a reversal down from a lower high major trend reversal (Feb 2).
  • The bulls got a reversal higher from a failed breakout below the February low.
  • Previously, they had a 6-bar bull micro channel. That means persistent buying. The market may have flipped into Always In Long.
  • Often, there are buyers below the first pullback from such a strong bull microchannel. This was the case in March.
  • With March closing near its high, odds slightly favor April to trade at least a little above March high.
  • The bulls want another strong leg up lasting a couple of months testing around the January/February 2022 high.
  • For this, they need to create consecutive bull bars breaking far above February 2 high, the bear trend line and the 20-month exponential moving average.
  • The last 3 candlesticks are overlapping sideways, alternating between bull and bear candlesticks. That means the EURUSD is in a trading range.
  • Traders will BLSH (Buy Low, Sell High) until there is a strong breakout from either direction with follow-through buying/selling.

The Weekly EURUSD chart

EURUSD Weekly: Double Top, Micro Double Top, MC Wedge
  • This week’s candlestick on the weekly EURUSD Forex chart was an inside bull bar with a prominent tail above.
  • Last week, we said that traders will see if the bulls can create a follow-through bull bar or will the bears create a failed breakout of the OO pattern instead.
  • This week traded sideways to up but did not break above last week’s 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. It is happening now.
  • They got a reversal up from a double bottom bull flag (Jan 6 and Mar 15) to retest near the February high.
  • The bulls need to create follow-through buying breaking far above the February high to convince traders that another big leg higher is possibly underway.
  • The prominent tails above the last 2 candlesticks indicate the bulls are not yet very strong.
  • The bears want a reversal down from a lower high major trend reversal. They see a micro wedge (Mar 7, Mar 15, and Mar 23) and a micro double top (Mar 23 and Mar 30) forming.
  • They want a retest of the March 15 low.
  • The problem with the bear’s case is that they have not been able to create credible bear bars with follow-through selling since the end of February.
  • They will need to create a strong bear signal bar before traders will be willing to sell more aggressively.
  • Since this week was an inside bull bar, that means the EURUSD is in breakout mode. The bulls want a breakout above while the bears want a breakout below it.
  • The first breakout from an inside bar can fail 50% of the time.
  • Often, the candlestick following an inside bar is another inside bar or has a lot of overlapping price action. 
  • If it is another inside bar, it will form an ii (inside-inside) pattern which is also a breakout mode pattern.
  • For now, the EURUSD is in a trading range between 1.1 and 1.05. 
  • Traders will BLSH (Buy Low, Sell High) until there is a strong breakout from either direction with follow-through buying/selling.
  • Traders will see if the bulls can create a strong breakout above this week’s high or will the EURUSD trade slightly higher but fail and close as a bear bar or with a long tail above.

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