NZD/JPY Inside Bar
Market Condition: NZD/JPY Inside Bar Breakout
Target 1: 1x Reference Bar Extension (117 pips)
Target 2: 2x Reference Bar Extension (234 pips)
Invalidation: Continued Consolidation
(Created using Marketscope 2.0 Charts)
The NZD/JPY is currentl trading inside of Thursday’s high and low, opening the pair to potentially close the week with an inside bar. When using Thursday’s daily bar as a reference, its high at 75.68 is currently acting as a point of resistance. Alterneatively, the daily low at 74.65 is currently acting as a value of support. If price action closes between these values, traders may begin looking for a potential breakout at the beginning of next week. Daily ATR for the NZD/JPY reads at 117 pips. When using a 1X ATR initial profit target, bullsih breakouts may look for a move towards76.85. Conversely, a bearish breakout bellow support my initially target a price of 73.48 ATR may also be used to manage risk when trading inside bars. When using ½ of Daily ATR (58.5pips) to place stops, this creates a 1:2 risk reward ratio when paired with a 1X ATR take profit point.
In the event that prices fail to breakout on Monday, traders will have the option to continue trading the range as prices stay inside of Thursdays high and low. In this scenerio, any breakout entries would at least be temporarily suspended.
To Receive Walkers’ analysis directly via email, please SIGN UP HERE
See Walker’s most recent articles at his Bio Page.
Contact and Follow Walker on Twitter @WEnglandFX.
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.