Market Condition: Pending Breakout
Target 1: 100% of Daily ATR (104 pips)
Target 2: 200% of Daily ATR (208 pips)
Invalidation: Continued Consolidation
USDCAD 1Day Chart
(Created using Marketscope 2.0 Charts)
After trading to a new 2015 high yesterday, the USDCAD is working on closing out Friday’s trading by creation an inside bar. If the current price action closes “inside” of the reference candles high and low, as displayed in the graph above, traders may begin looking for a breakout at the start of next week’s trading. Resistance is marked by yesterday’s high at 1.3416. A breakout above this value would be considered bullish on the creation of a new yearly high. Conversely, a move below support found at 1.3291 would be considered bearish. In the event of either breakout scenario, ATR can be used to project potential profit targets. Current daily ATR equals 104 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 USDCAD 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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