EUR/USD pending breakout to new monthly high.
Market Condition: Pending Breakout
Target 1: 2x ATR 1.1187
Target 2: 4x ATR 1.1393
Invalidation: 1X ATR at 1.0878
EUR/USD 1Day Chart
(Created using Marketscope 2.0 Charts)
Last Friday the EUR/USD broke out to a monthly high and advanced as much as 465 pips. However, so far in this week’s trading, prices have failed to breakout to a higher high. As prices continue to consolidate under the December high at 1.0981, traders looking for a continuation of this bullish trend may begin planning for a breakout above this point. In the event the EUR/USD trades to a new high, ATR can then be used to measure potential take profit points. Currently, daily ATR measures 103 pips. Using 2x daily ATR, initial targets for the EUR/USD would be located at 1.1187. While traders looking for a 4x ATR extensions for the pair can begin targeting a move toward 1.1393
In the event of a false breakout, traders should have a plan to manage risk. If prices fall back below previous resistance (1.0981), traders using a 1x ATR stop may places orders to exit the market near 1.0878. In this scenario, traders should reconsider the current bullish momentum behind the EUR/USD and reevaluate the markets chosen direction.
To Receive Walkers’ analysis directly via email, please SIGN UP HERE
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.