EUR/GBP Pending Bearish Breakout
Market Condition: EUR/GBP Pending Breakout
Target 1:______2X ATR at .8189
Target 2:______4X ATR at .8065
The EUR/GBP has retraced off of its yearly lows with week, allowing traders to plan for the markets next breakout. As seen on the daily graph above, traders may plan for a breakout below the April 18th low at .8313. Daily ATR (average true range) for the EUR/GBP reads at 62 pips. This value may be used to manage risk and set initial profits targets for any new market breakouts. If the market trades lower next week, traders may elect to use a 2X ATR extension ATR to find initial profit targets near .8189. Further extensions open up a potential 4X ATR profit target near.8065.
Traders may also consider using ATR to manage risk. A 1X ATR stop loss may be considered near .8375 to set up an initial 1:2 risk/reward ratio. Traders should also remember that the EUR/GBP may fail to breakout to new lows. In this bullish scenario, traders may elect to delete any pending entry orders to sell the market if the EUR/GBP trades above the April 26th swing high at .8495.
--- 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.