GBP/USD Signal Update
Yesterday’s long signal was almost triggered by an engulfing bar early during the London session, but the bar closed above 1.6630 which was too high for an entry. This was fortunate as that long trade would have been a losing trade. Towards the end of the London session there was another engulfing bar that gave a better entry, but by then the trade had already been invalidated.
Today’s GBP/USD Signal
Risk 0.50%.
Entry must be made before 5pm London time today.
Long Trade
Enter long with a limit buy order at a first touch of 1.6475.
Stop loss at 25 pips.
Move the stop loss to break even when the trade is 45 pips in profit and take 75% of the position as profit there. Leave the remainder of the position to run.
GBP/USD Analysis
I was correct to see tradable support at 1.6620 yesterday, although unfortunately the support did not express itself in a way that made it easy to trade safely. Although there was an hourly close below that level, looking at the chart we have to say that 1.6620 has “held”, but it has been tested too much lately to go for another bounce there today. This is why I am ignoring 1.6620 now and only looking for another long opportunity at the much lower level of 1.6475.
Christopher Lewis made a good call in identifying a supportive zone zone between 1.6500 and 1.6600. He now sees 1.6500 as a good level at which to wait for a long.
There are no obvious support turned into resistance levels above us, so I have no obvious zone at which to look for a short, therefore I am focusing on the long side.
As I mentioned yesterday, the longer-term picture is bullish and the bearishness should only be a temporary pull-back. For these reasons coupled with yesterday’s price action, I think we are going to see a continued move up today before we reach 1.6620 again. There is some resistance at 1.6700 which may limit the move up. If that is breached, 1.6750 may prove harder to break to the upside.
There is no important GBP data scheduled for release today. For the USD, there is BC Consumer Confidence data that will be released at 3pm London time.