Market Condition: AUD/USD Breakout
Target 1: 2x ATR .7656
Target 2: 4x ATR .7870
Invalidation: Price Remains Under Resistance
(Created using Marketscope 2.0 Charts)
After declining as much as 474 pips for the 2016 trading year, the AUD/USDhas begun to retrace back towards a series of key resistance points. The next value of resistance is a trendline, which is depicted above by connecting a series of swing highs. The last swing high in this series is the February 2016 high which is found at a price of .7242. A breakout above both of these values would suggest a turn in the markets current downtrend. In the event of a bullish breakout, traders may then use ATR to extrapolate potential price targets. Current daily ATR reads at 107 pips. Using a 2X ATR extension this places initial bullish targets near .7656.
If prices reach resistance and fail to breakout, it would suggest that price may retrace lower. In this scenario, traders will look for prices to test the current 2016 low at a price of .6827.
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