GBPUSD Prepares for an Inside Bar Breakout
Market Condition: Pending Breakout
Target 1: 100% of Daily ATR (117 pips)
Target 2: 200% of Daily ATR (234 pips)
Invalidation: Continued Consolidation
GBPUSD 1Day Chart
(Created using Marketscope 2.0 Charts)
After a series of bullish breakouts, the GBPUSD is working on closing the week with the creation of an inside bar. If currency price action closes “inside” of the reference candles high and low, traders may begin looking for a breakout at the start of next week’s trading. Resistance is market with yesterday’s high at 1.5476, and a breakout above this value would be considered a bullish on the creation of a new higher high. Conversely bearish breakouts begin below support found at 1.5388. A move below this point suggests that the pair may be developing a new bearish bias. In the event of either a bullish or bearish breakout, ATR can be used to project potential profit targets. Current daily ATR equals 117 pips and can be added to an entry in either scenario.
In the event that prices fail to breakout below the high and low set by the reference candle, this suggests that the GBPUSD will continue to consolidate inside of support and resistance. In this instance, it would tentatively delay the execution of any breakout based entry orders.
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