Yesterday’s signals produced a losing long trade at 1.2508 following the bullish pin-type candle rejecting that support level on the hourly chart.
Today’s GBP/USD Signals
Risk 0.75% per trade.
Trades may only be taken from 8am to 5pm London time today.
Long Trade 1
* Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of 1.2374.
* 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 1.2508.
* 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
This pair was looking quite bullish, as if it would continue to push upwards and retest the key resistance at 1.2610 and possibly even the very important long-term bearish trend line above that. However, after an initial struggle at the support level of 1.2508, the price broke down strongly and is now right in the middle of its recent price area, albeit on a supportive trend line which may give a bottom. From this area, I believe bulls may have a slight edge, but the pair is looking less attractive to trade otherwise.
Regarding the GBP, there will be a release of Construction PMI data at 9:30am London time. There is nothing due concerning the USD.