Yesterday’s signals were not triggered as unfortunately the inside candle rejection of the resistance level identified at 1.2250 came right at the end of the session.
Today’s GBP/USD Signals
Risk 0.75% per trade.
Trades must be taken before 5pm London time today only.
Long Trade 1
• Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of 1.2133.
• Place 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.
• Remove 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 1
• Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.2250.
• Place 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.
• Remove 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
The British Parliament has just instructed the British government to begin the process of formally leaving the European Union. This has sent the Pound flying downwards as London begins to open. At the time of writing the price is again testing the significant support level at 1.2133. If it breaks down, and it looks as if it is likely to, we could see a further sharp fall as far as the 1.2000 area.
If the price does hold and begins to rise, extreme caution should be exercised in taking any long trade from here.
There is nothing due today regarding the GBP. Concerning the USD, there will a release of PPI data at 12:30pm London time.
Yesterday’s signals gave a profitable short trade just after the London open following a bearish outside candle rejecting the resistance level identified at 1.0712. At the time of writing it looks as if the price will continue to fall, so it is probably a good idea to stay in the trade if possible.