GBP/USD Signal Update
Thursday's signals were not triggered and expired.
Today’s GBP/USD Signals
Risk 0.25%.
Entry should be made before 5pm London time today only.
Long Trade 1
Enter long at the next bar break of an hourly pin or strong engulfing or outside bar rejecting and closing above the support level of 1.6230. If this level is not touched and rejected by the same hourly bar, or if an hourly bar closes more than a few pips below this level, the trade is immediately invalidated and should not be taken.
Stop loss at the local swing low or 1.6190, depending upon how close the entry is to 1.6230. If the entry is very close, then the higher of the two should definitely be used.
Take profit on 75% of the position at 1.6250 and tighten the stop by using a trailing stop of 20 pips. Let the rest of the position ride and take half of the remainder as profit at 1.6350.
Long Trade 2
Enter a long touch trade by placing a limit order at 1.6196 with an initial stop loss at 1.6162.
Take profit on 75% of the position at 1.6229 and move the stop loss to break even.
Take half of the remainder of the position as profit at 1.6250 and then half again when the price retests the broken trend line marked in the charts below. Let the rest of the position ride.
Short Trade 1
Enter short at the next bar break of an hourly pin or strong engulfing or outside bar rejecting and closing below the support level of 1.6350. If this level is not touched and rejected by the same hourly bar, or if an hourly bar closes more than a few pips below this level, the trade is immediately invalidated and should not be taken.
Stop loss at the local swing high or 1.6380, depending upon how close the entry is to 1.6350. If the entry is very close, then the higher of the two should definitely be used.
Take profit on 75% of the position at 1.6305 and tighten the stop by using a trailing stop of 40 pips. Let the rest of the position ride and take half of the remainder as profit at 1.6260.
Short Trade 2
Enter a short touch trade by placing a limit order at 1.6416 with an initial stop loss at 1.6456.
Take profit on 75% of the position at 1.6355 and move the stop loss to break even.
Take half of the remainder of the position as profit at 1.6260. Let the rest of the position ride.
GBP/USD Analysis
No major data is expected today on either the GBP and USD, therefore it might well be a quiet day.
The broad outlook shows that this pair, which has been in a strong uptrend, printed a bearish engulfing bar on the daily chart last Wednesday. The low of this was broken to the down side on Thursday, and the pair made lower lows and lower highs on both Thursday and Friday. Additionally, the lower bullish trend line was broken, retested and held its break, after having been established for a month, which is likely to be a significantly bearish event.
The pair printed two support turned resistance levels: a very clearly defined level at 1.6417, and another les clearly defined one at 1.6350. The latter is also confluent with the 23.6% Fibonacci retracement of the bullish trend line move up, today's R1 pivot, and is also a round number.
I see more scope on the bear side but I am taking no bias and can see both long and short trades possible today.
Below we have the support level of 1.6257 which came very close to being touched on Friday and has already given more than 40 pips since then, so it could be dangerous to trade at this level if it were touched today. However below that is the 50% Fibonacci retracement of the bullish trend line move up at 1.6230 which is also confluent with previous resistance, as can be seen on the far left of the chart below. This is a suitable place therefore to look for a long, as it 1.6195 below.
