Market Condition: Pending Breakout
Target 1: 100% of Daily ATR (130 pips)
Target 2: 200% of Daily ATR (260 pips)
Invalidation: Continued Consolidation
EURJPY 1Day Chart
(Created using Marketscope 2.0 Charts)
After yesterday’s bearish breakout, the EURJPY is working on the creation of an inside bar. If currency price action closes “inside”, traders may begin looking for a breakout using the reference candles high and low for values of support and resistance. A breakout above 136.24 would be considered a bullish breakout on the creation of a higher high. Conversely a bearish breakout below 134.67, would open the pair to move on towards lower lows. In the event of either breakout, ATR can be used to project potential profit targets. Current daily ATR equals 130 pips and can be added to an entry in either scenario.
In the event that prices fail to breakout through the mentioned values of support and resistance, this suggests that the EURJPY will continue to consolidate inside of its trading pattern. If this occurs, it would tentatively delay the execution of any breakout based entry orders.
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