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EURUSD Trading Range

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Market Overview: EURUSD Forex

The monthly chart formed a EURUSD trading range closing as an inside bear bar. The bears need to create a follow-through bear bar closing below the 20-month EMA to increase the odds of reaching the October low. The bulls want the 20-month EMA to act as support.

EURUSD Forex market

The Monthly EURUSD Forex chart

EURUSD Monthly: Trading Range, Bear Inside Bar, EURUSD Trading Range
  • The January monthly EURUSD candlestick was a bear inside bar closing near its low.
  • Last month, we said that the odds slightly favor the market to still be in the sideways to up phase. If the bulls can create another follow-through bull bar in January, it will increase the odds of a retest and breakout attempt above the July high.
  • January traded lower and around the 20-month EMA. 
  • The bulls got a reversal from a double bottom bull flag (Jan 6 and Oct 3) and a retest of the trading range high.
  • However, they were not able to get sustained follow-through buying and the market reversed back to the middle of the trading range.
  • They see January as a pullback and want at least a small second to retest the December high.
  • They want the 20-month EMA to act as support.
  • The bears see the prior move up (Dec 28) as a retest of the July high and want a reversal from a lower high major trend reversal.
  • They see the market as being in a 14-month trading range and the EURUSD was trading in the sell zone of trading range traders.
  • They managed to get a strong bear bar closing near its low in January.
  • They will need to create a follow-through bear bar closing below the 20-month EMA to increase the odds of a retest of the October low.
  • Since January is an inside bear, the market is in breakout mode.
  • Because it is an inside bear bar closing near its low, odds favor a breakout below first which it has done (in Feb).
  • For now, the market remains in a 14-month trading range and is trading around the middle of the trading range. It is an area of balance.
  • Traders will see if the bears can create a follow-through bear bar in February. If they do, it will increase the odds of a retest of the October low.
  • Odds slightly favor the market to trade lower in the first half of the month.

The Weekly EURUSD chart

EURUSD Weekly: Consecutive Bear Bars, Bear Need FT
  • This week’s candlestick on the weekly EURUSD Forex chart was a bear bar closing in near its low with a long tail above.
  • Last week, we said that the odds slightly favor the pullback to be minor and the market to still be in the bull leg phase. However, if the bears can get a few strong consecutive bear bars closing below the 20-week EMA, it can swing the odds of the bear leg beginning.
  • This week traded above the 20-week EMA, but the bulls were not able to get sustained follow-through buying. The market reversed to close below the 20-week EMA.
  • The bulls want a retest of the July high followed by a continuation higher in the form of a large second leg up (with the first leg being September 2022 to July 2023 rally).
  • They see the current pullback as minor even if it lasts a few weeks. 
  • They want the 20-week EMA to act as support, followed by a reversal from a double bottom bull flag (Dec 8 and Feb 1).
  • If the market continues to trade lower, the bulls want a reversal from a double bottom bull flag with the Dec 8 low.
  • The bulls will need to create a few consecutive bull bars trading above the 20-week EMA to increase the odds of the bull leg resuming.
  • The bears see the rally since October as a retest of the prior leg’s extreme high (Jul 18).
  • They got a reversal from a wedge bear flag (Nov 3, Nov 29, and Dec 28) and a lower high major trend reversal.
  • They managed to create a few consecutive bear bars in a tight channel which has closed below the 20-week EMA.
  • If the bears manage to get sustained follow-through selling, it will increase the odds of a deeper pullback.
  • The bears want a retest of the trading range low (Oct 2023 low).
  • Since this week’s candlestick is a bear bar closing near its low, it is a sell signal bar for next week.
  • For now, odds slightly favor the market to trade sideways to down.
  • Traders will see if the bears can get follow-through selling.
  • The EURUSD is in a 62-week trading range. (Trading range high: July 2023, Trading range low: Oct 2023)
  • 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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