GBP/USD Signal Update
Yesterday’s signals were not triggered as there was insufficiently bearish price action at any of the key resistance levels that were reached.
Today’s GBP/USD Signals
Risk 0.75% per trade.
Trades may only be entered between 8am and 5pm London time today.
Long Trades
Long entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of 1.2300 or 1.2232.
Put the stop loss 1 pip below the local swing low.
Move 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 ride.
Short Trades
Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.2388 or 1.2419.
Put the stop loss 1 pip above the local swing high.
Move 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 ride.
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
The British government finally outlined its Brexit plan yesterday and despite going for a hard Brexit, by confirming that Parliament would have a vote on any final deal, boosted the Pound by a lot. This pair then went on to record its biggest 1-day rise since 2008 and is currently trading above its price from 3 months ago, a key metric which suggests that the long-term post-Brexit bearish trend may be over. The chart below also shows the price has broken strongly and cleanly out of a bearish channel which it was locked within.
It will be interesting to see if the price continues to hold up, or whether it falls back down quickly. If it holds up, then the bearish trend will be seen to be over.
Regarding the GBP, there will be a release of Average Earnings Index and Claimant Count Change data at 9:30am London time. Concerning the USD, there will be a release of CPI data at 1:30pm followed by a minor speech from the Chair of the Federal Reserve at 8pm.