GBP/NZD Pending Breakout
16 May 2016 17:55, GMTMarket Condition: GBP/NZD Daily Breakout
Target 1: 4x ATR 2.1912
Target 2: 8x ATR 2.2318
Invalidation: New Lower Low
(Created using Marketscope 2.0 Charts)
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The GBP/NZD is currently trading higher, after breakout above a descending trendline. As prices continue to trade higher, traders may look to join the new trend on the creation of a new higher high. Entry orders may be set above the March 2016 high at 2.1506. If a new buy order is triggered, traders may use Daily ATR to manage risk and extrapolate potential profit targets. As of today, Daily ATR reads at 203 pips. This means initial 4X ATR profit targets may be found near 2.1912. Alternatively, a 1X ATR stop order may be used to manage risk at 2.1303.
In the event that prices fail to break higher, traders may delete any pending orders to buy the market. In this scenario, traders may consider the standing May 2016 high at 2.1486 as a lower swing high. This would potentially open the GBP/NZD to continue its downtrend, leaving traders to look for a new yearly low under 2.0358.
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.