Will Breakout Confirm?

The advance today triggered a breakout of the closest prior swing high in the series of lower swing lows at 3.02. Once there is a daily close above 3.02, assuming further bullish moves, an upside breakout of a large symmetrical triangle pattern will have confirmed the breakout. In addition, today’s rally triggered a likely continuation of the bull trend that started from the August swing low, as there is now a higher swing high. A daily close above the 3.02 high also will confirm the continuation of that trend. A confirmed breakout indicates that there is a greater chance for a continuation of the move.

Upside Looks Towards 3.35

Once the price structure of the triangle is busted with a higher swing high, previous higher swing highs become a target. And a confirmed breakout above either will provide another sign of strength. The first is 3.16 from the peak in June. Given the potential improvement in momentum once a breakout is confirmed that price target may easily be surpassed leading to 3.22.

However, that is a short-term target as it is derived from the most recent rising ABCD pattern (light blue) that shows price symmetry between the two swings at that target. Further up is a price zone of potential resistance from 3.35 to 3.45. An ascending ABCD pattern (purple) reaches its target at 3.35. At 3.39 there is a match with resistance seen at the January peak, while there is an extended ABCD target at 3.42. The range ends with the target from a large rising ABCD pattern at 3.45.

For a look at all of today’s economic events, check out our economic calendar.