Market Condition: NZD/USD Pending Breakout
Target 1: 1X Range Bullish .7286 Bearish .7019
Target 2: 2x Range Bullish .7372 Bearish .6930
Invalidation: NZD/USD False Breakout
NZD/USD Daily Chart
(Created using Tradingview Charts)
The NZD/USD is set to conclude this week’s trading with an inside bar. This charting pattern is predicated on the NZD/USD closing below yesterday’s high and above yesterday’s low. In this scenario, traders can uses these values as a reference of support and resistance to plan for a breakout at the beginning of next week’s trading. It should be noted that Tuesdays high was found at a price of .7197, and the low at .7108. Traders may find initial breakout targets by extrapolating 1X the distance of the identified range. This places bullish targets near .7286 and bearish breakout targets at .7019.
In the event of a false breakout, traders may consider using half the distance of the identified inside bar range to create an initial 1:2 Risk/Reward ratio. Alternatively, traders should remember that the NZD/USD might continue to consolidate between support and resistance. In this scenario, traders may elect to leave pending entry orders for an eventual breakout, or opt to trade the ensuing range.
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