Yesterday’s signals were not triggered as there was insufficiently bearish price action when the price reached the resistance level identified at 1.2250.
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 1.2139.
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 more dovish than expected stance on inflation by the FOMC yesterday saw the Dollar drop across the board. This pair was no exception but the British Pound was about the weakest gainer of all the major currencies, remaining within a long-term downwards trend technically, which is significant. If the Dollar recovers, we are likely to see that best expressed here. The reaction at the key psychological level of 1.2250 if and when next reached should give us a clue.
Regarding the GBP, there will be releases of the Bank of England’s Monetary Policy Statement, Official Bank Rate and Votes at Noon London time. Concerning the USD, there will be releases of Building Permits, Philly Fed Manufacturing Index, and Unemployment Claims data at 12:30pm.