Yesterday’s signals were not triggered as neither of the key levels were ever reached.
Today’s GBP/USD Signals
Risk 0.75% per trade.
Trades may only be entered between 8am and 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 1.2850.
- 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
- Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.3000.
- 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 remains in a long-term bullish trend but is finding it difficult to rise, although it is strongly supported below at 1.2850. The medium-term picture shows a new consolidating triangle, replacing the one which was broken yesterday, with a bullish breakout looking more likely than a bearish breakdown. A sudden spike up to 1.3000 or the area just underneath that price could be an excellent short, as there is strong long-term selling up there, and it is unlikely to break easily. The 1.3000 level has not even been touched so there should be plenty of limit sell orders sitting there.
It is significant that at a time when almost everything else is rising against the U.S. Dollar, the British Pound is hardly rising at all.
Concerning the GBP, there will be a release of Average Earnings Index data at 9:30am London time. Regarding the USD, there will be a release of Crude Oil Inventories data at 3:30pm.