EUR/USD Attempts a Bullish Daily Breakout
Market Condition: EUR/USD Pending Breakout
Target 1:______2X ATR at 1.1154
Target 2:______4X ATR at 1.1284
The EUR/USD has retraced off of its yearly highs, which were put in place in early trading at the conclusion of the 2017 French presidential election. As seen on the daily graph above, this retracement may allow traders to plan for the EUR/USD’s next bullish breakout above the high at 1.1024. Daily ATR (average true range) for the EUR/USD reads at 65 pips. This value may be used to manage risk and set initial profits targets for any new market breakouts. If the EUR/USD breaks higher above 1.1024, traders may elect to use a 2X ATR extension to find initial profit targets near 1.1154. Using a potential 4X ATR profit target places an extended potential take profit level near 1.1284.
Traders may also consider using ATR to manage risk. A 1X ATR stop loss may be considered at 1.0959 to create an initial 1:2 risk/reward ratio. In the event that the EUR/USD fails to breakout higher, traders should look for the pair to decline back below its 10 day EMA (exponential moving average) at 1.0930. A move below this price would suggest a temporary reversal in market momentum, at which point traders may elect to look for other breakout opportunities.
--- Written by Walker, Analyst for DailyFX.com
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