Scenario 1: price continues its strong move upwards and smashes through the 0.78285 level. The trigger for this trade for my trading system would be a break and close above this level, and then a re-test of the level to confirm it as a role-reversal level (what was once resistance now becomes support) where price does not close below the level. The timeframe I would be looking at for this trigger would be the 4HR chart. ***** HOWEVER ***** It is possible that price just continues its march upwards without pulling back to this key level. An indication that this is the case would be a strong candle that closes near its highs and does not have much of a lower wick (indicating an absence of sellers and strong institutional buying activity). It is important in this case for the candle to clear the level by a considerable distance to confirm a valid breakout.
Scenario 2: This is the scenario I believe to be more likely, and the one I will be watching for. After running into the 0.78285 level, my analysis is that price will reverse in the short-term and pullback to either a previous level or to a dynamic (such as the 20 I personally use on my charts) before making a drive through the 0.78285 level. In this scenario I would wait for price to pullback to the 20EMA, and confirm a swing low, thereby giving me a signal that the price has finished correcting and bulls are ready to start buying once more. Ideally, there will be some clearing distance between this swing low point and the 0.78285 level, allowing for some profits to be taken if the 0.78285 level holds and price decides to reverse. The key to identifying whether the level will hold or not will be in the price action context leading up to its move towards the level. IF I identify a pre-breakout price action structure I will update this idea further.
Stop Loss: 0.77985
Target 1: 0.79000
Target 2: 0.79500
Target 3: 0.80000