GBP/USD Daily Bar Breakout
Market Condition: GBP/USD Inside bar Breakout
Target 1: 1x Reference Bar Extension
Target 2: 2x Reference Bar Extension
Invalidation: Continued Consolidation
GBP/USD Daily Chart
(Created using Marketscope 2.0 Charts)
After advancing as much as 737 pips for the month of January, the GBP/USD has begun to consolidate on the daily chart. As seen in the chart above, this consolidation is taking the form of an inside bar. Traders looking for a breakout may use Friday’s daily candle as a reference for support and resistance. Currently resistance is found at 1.4362, while support is found below at 1.4204. In the event that price breaks either above resistance or below support, traders may consider using a 1-x extension of the 158-pip reference bar to identify potential price targets. This places initial bullish targets at 1.4520, and bearish targets near 1.4047.
If prices continue to trade “inside” and fail to breakout, it would suggest further consolidation is in store for the GBP/USD. In this scenario, any breakout entries would be at least temporarily suspended.
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