NZD/USD Pending Bearish Breakout
Market Condition: NZD/USD Pending Breakout
Target 1:______2X ATR at .6792
Target 2:______4X ATR at .6699
The NZD/USD is now trending towards new yearly lows, allowing traders to plan for a fresh bearish breakout. Traders may plan to enter into the market below the January 3rd low at .6884. It should be noted that daily ATR (average true range) for the NZD/USD reads at 46 pips. Upon a breakout, traders may elect to use a 2X ATR extension ATR to find initial profit targets near .6792. Further extensions open up a potential 4X ATR profit target near.6699.
Traders may also consider using ATR to manage risk. A 46 pip stop loss at .6930 would set up an initial 1:2 risk/reward ratio. In the event that the NZD/USD fails to breakout lower, traders may opt to delete any pending entry orders on the creation of a new monthly high above .7057.
--- Written by Walker, Analyst for DailyFX.com
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.