GBP/USD Signal Update
Yesterday’s signals were not triggered and expired.
Today’s GBP/USD Signals
Risk 0.50%.
Entry should be made between 8am and 5pm London time today only.
Long Trade 1
Enter long with a buy limit order at the first touch of 1.6235.
Stop loss at 1.6195.
Move the stop loss to break even when the trade is 25 pips in profit and leave the position to run.
Short Trade 1
Enter short with a sell limit order at the first touch of 1.6619.
Stop loss at 1.6660.
Move the stop loss to break even when the trade is 40 pips in profit and leave the position to run.
GBP/USD Analysis
Yesterday we had a move down and the long-term trend line was broken with a daily close below it. This is a significantly bearish development but the situation is still unclear. As I predicted, the level at 1.6325 acted as support but the price has not moved up more than about 50 pips from there, as it is being held by a retest of the triangle trend line, which is also a minor resistance level right now (1.6375) and the daily pivot. So, we have had a bearish break down through the triangle, and the crucial test now will be if price manages to break up strongly back into the triangle, or continue downwards through the support at 1.6325 and down to 1.6250 beyond that.
As things are so uncertain, I don’t see clear levels to trade confidently that are close by, therefore I have outlined above touch trades in either direction that are quite far away from the current price. It could be possible to scalp off localized support at 1.6325, but I am not giving that as a signal.
Later today we will have several key events directly affecting the USD. There is important news due at 1:30pm London time (Core CPI, Unemployment Claims), then again at 3pm (Philly Fed Manufacturing Index). Finally, at 4:10pm, the outgoing Chair of the Federal Reserve Ben Bernanke is speaking. Therefore there will probably be most activity in this pair during the New York session.