Market Condition: EUR/GBP Inside Bar Breakout
- Target 1: 1-x Reference Bar Extension
- Target 2: 2-x Reference Bar Extension
- Invalidation: Continued Consolidation
(Created using Marketscope 2.0 Charts)
After advancing as much as 382 pips for the month of January, the EUR/GBP has begun to consolidate. This consolidation, as seen above, is occurring with a series of inside bars. Traders watching this bar pattern develop; have the opportunity to wait for a breakout. A move about resistance would be considered a continuation of the pair’s current trend, while a break below support may signal a potential reversal. Using last Friday’s price action as a reference, current resistance for the pair is found at a price of .7694. Alternatively, support is found at the daily low at a price of .7525. In the event that consolidation concludes and prices breakout, traders may consider using a 1-x extension of the 169-pip reference bar to identify potential price targets. This places initial targets at either .7863 or .7356, for a bullish or bearish breakout respectfully.
In the event that prices fail to breakout, it would suggest that prices might continue to consolidate. In this scenario, any breakout entries would be at least temporarily suspended.
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