My previous GBP/USD signal on 25th June was not triggered, as there was no bullish price action when the support level identified at $1.2674 was first reached that day.
Today’s GBP/USD Signals
- Risk 0.75%.
- Trades may only be entered prior to 5pm London time Wednesday.
Long Trade Ideas
- Go long following a bullish price action reversal on the H1 timeframe immediately upon the next touch of $1.2603, $1.2592, or $1.2569.
- Put the stop loss 1 pip below the local swing low.
- Adjust the stop loss to break even once the trade is 25 pips in profit.
- Take off 50% of the position as profit when the price reaches 25 pips in profit and leave the remainder of the position to run.
Short Trade Ideas
- Go short following a bearish price action reversal on the H1 timeframe immediately upon the next touch of $1.2658, $1.2716, or $1.2738.
- Put the stop loss 1 pip above the local swing high.
- Adjust the stop loss to break even once the trade is 25 pips in profit.
- Take off 50% of the position as profit when the price reaches 25 pips in profit and leave the remainder of the position to run.
The best method to identify a classic “price action reversal” is for an hourly candle to close, such as a pin bar, a doji, an outside or even just an engulfing candle with a higher close. You can exploit these levels or zones by watching the price action that occurs at the given levels.
GBP/USD Analysis
I wrote in my previous GBP/USD forecast that the area between $1.2716 and $1.2738 was likely to be a pivotal area, but the price never reached it.
The technical picture continues to look bearish here, with the US Dollar in a long-term bullish trend, dragging the price down. A higher timeframe price chart shows topping price action with the price poised to move lower. This is confirmed by drilling down the hourly price chart shown below, which seems to show a kind of bearish head and shoulders pattern rejecting a pivotal resistance level at $1.2658.
I therefore see the situation as bearish as long as the price remains below $1.2658. The key neckline which bears must break is the support level’s confluent round number at $1.2600. If the price gets established below that level, it could fall quite fast. However, I think this support might well hold until there is a major USD release, so a long scalp off a bounce at $1.2603 could be a good day trade which might set up today.
There is nothing of high importance scheduled today concerning the GBP. Regarding the USD, the Chair of the Federal Reserve will be giving a minor speech at 2:30pm London time, followed by the release of JOLTS Job Openings data half an hour later.
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