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Talking Points
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USDollar Breaks to Highs Above R4
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Range Resistance Sits at 10,476
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Price Below R3Signals a False Breakout
USDollar 30min Chart
(Created using FXCM’s Marketscope 2.0 charts)
The USDollar has opened the trading day stronger with an early morning breakout. Resistance, as marked above by the R4 camarilla pivot, resides at 10,476. Price has broken above this value twice as the USDollar continues to move towards higher highs above this value. Breakout and trend trader can take advantage of this directional move by looking for opportunities to sell pairs such as the GBPUSD and AUDUSD.
Breakout traders should always be wary of a change in market conditions, potentially signaling a false price break. Utilizing camarilla pivots, a false breakout would be identified by price moving back inside of the predefined trading range. Currently the range is defined by R3 resistance at 10,473 and the S3 support line at 10,466 .A price decline back to this point would signal a change in market conditions, in which traders should consider concluding any breakout trades while, considering entries with the markets new influenced direction.
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--Written by Walker England, Trading Instructor
To contact Walker, email wengland@fxcm.com. Follow me on Twitter @WEnglandFX.
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Previous Market Setups:
FX Reversals: EURUSD Intraday Breakout
FX Reversals: EURAUD Breaks Support
FX Reversals: AUDUSD Support Update
FX Reversals: USDJPY Reaches Range Resistance
FX Reversals: Mondays EURUSD Range
original source