Market Condition: EUR/USD Pending Breakout
Target 1: 1x Range Bullish .8601 Bearish .8253
Target 2: 2x Range Bullish .8717 Bearish .8137
EUR/GBP Daily Consolidation
(Created Using TradingView Charts)
The EUR/GBP has declined in this morning’s trading, however the pair has failed to breakout to a new daily low. This has left the pair set to close the week with the creation of an inside bar. This candle patter is depicted graphically above, using Thursday’s high and lows as points of support and resistance. Traders may elect to look for bullish breakouts contra to the trend above Thursday’s high of .8485. Alternatively, a breakout below support at .8369 could be considered a bearish trend continuation signal. In either scenario, traders may extrapolate a 1X extension of the 116 pip range to find preliminary pricing targets. This places initial bullish targets near .8601 and bearish targets of .8253.
In the event that a breakout occurs next week, traders may consider this range for managing risk. In the event of a false breakout traders may consider using ½ the distance of the identified range (58 pips) to create a 1:2 risk reward ratio.
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