Market Condition: EUR/USD Daily Breakout
Target 1: 2x ATR1.0912
Target 2: 4x ATR1.0728
Invalidation: False Breakout to 1.1188
(Created using Marketscope 2.0 Charts)
The EUR/USD attempted to breakout from an ascending trend line Thursday afternoon. However, prices have rebounded and are now trading back over support found near the low at 1.1129. Since Thursday’s move resulted in a false breakout, traders may now look for additional confirmation before selling the EUR/USD. One way to do this is to set entry orders to sell the EUR/USD below the previous swing low at 1.1096. A move through this point would not only push the pair through the ascending trend line, but also create a new daily swing low.
Current daily ATR for the EUR/USD reads at 92 pips. Traders looking for a 2X ATR profit target may look for a move towards 1.0912. In this scenario, using a 1X ATR stop at 1.1188. A move to this value would place EUR/USD prices back inside of the ascending trend line, and again suggest a false breakout.
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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