NZD/USD Pending Daily Breakout
Market Condition: NZD/USD Pending Daily Breakout
Target 1: 2X ATR .7498
Target 2: 4x ATR .7672
Invalidation: Failed Breakout / New 20 Day Low
(Created using Marketscope 2.0 Charts)
The NZD/USD has bounced off of support found near .7000. If the pair continues to trade higher next week, traders may look for a breakout above the 20 day high at .7324. Current daily ATR for the NZD/USD reads at 87 pips. Traders looking for a 2X ATR move may look for initial targets near .7498. Alternatively a 4X ATR extension may be found near .7672. Traders may also use a 1X ATR to manage risk. If stops are placed at .7237, this would create a positive risk reward ratio of 1:2 or better.
In the event that price fails to breakout to a new 20 day high, traders may delete any pending orders. A decline in price below .6951 would place the NZD/USD at a new 20 day low. In this scenario, traders may opt to sell the market with fresh downward momentum.
To Receive Walkers’ analysis directly via email, please SIGN UP HERE
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.