Market Condition: Breakout
Target 1: 1x Bar extension at 1.5536
Target 2: 2x Bar Extension 1.5410
Invalidation: 1.5725
GBPUSD 1Day Chart
(Created using Marketscope2.0 Charts)
The GBPUSD has been consolidating for the past 5 trading sessions. This has culminated in the formation of an inside bar pattern as depicted above. Support and resistance values for the pattern can be found for the pair using Monday’s daily bar as a reference. This would mark support at 1.5662, which has been broken in today’s trading session. In the even that bearish momentum continues, the next target for the GBPUSD will be found at 1.5536, which is a 1x extension of the reference bar.
In the event that the market fails to continue its move lower, traders will watch for prices to return inside of the markets previously defined range. If price moves back to 1.5725, the current breakout scenario would be considered invalidated. If prices continue to move higher traders can again use the reference bar for values of resistance, starting with the high at 1.5788.
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