Market Condition: USD/CAD Daily Breakout
Target 1: 1x ATR1.2540
Target 2: 2x ATR1.2427
Invalidation: False Breakout to1.2800
(Created using Marketscope 2.0 Charts)
The USD/CAD has declined as much as 328 pips last week, and closed trading just off the monthly low that resides at 1.2653. With price action consolidating going into the weekend, traders may begin to plan for the markets next major breakout. With 1.2653 now acting as daily support traders looking to join the trend may elect to place entry orders beneath this value.
Current daily ATR reads at 113 pips. Traders looking for a bearish breakout may extrapolate a 1X primary profit target at 1.2540. This may be followed up with a secondary 2X ATR target at 1.2427. In the event of a false breakout a ½ ATR stop may be used near 1.2800 to create a positive Risk/Reward ratio.
In the event that prices fail to breakout lower next week, traders may elect to delete any pending entry orders. A move to a new swing high would suggest that any bearish breakouts have been at least temporarily suspended.
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