The NZD/USD Consolidates With an Inside Bar
Market Condition: NZD/USD Inside Bar Breakout
Target 1: 1x Reference Bar Extension
Target 2: 2x Reference Bar Extension
Invalidation: Continued Consolidation
(Created using Marketscope 2.0 Charts)
The NZD/USD is looking to close the week with a consolidating inside bar. When looking at Thursday’s daily candle as a reference, today’s price action has so far failed to yield a new higher or low. Traders watching this pattern develop can use yesterday’s high and low as values of support and resistance, and begin preparing for a breakout next week. In the event that the market breaks to either a new high or low, traders may extrapolate potential price targets by using a 1X extension of yesterday’s reference bar. In this scenario, this places initial price targets at .6962 and 6662 for bullish and bearish breakouts respectfully.
In the event that prices fail to breakout on Monday, traders will have the option to continue trading the depicted daily price range. In this scenario, any breakout entries would at least be temporarily suspended.
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.