Yesterday’s signals were not triggered, as there was no bearish price action at the resistance levels.
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 1.3114.
· Put 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 1.3167.
· Put 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 Pound has been relatively weak compared to the Euro and most of the commodity currencies such as the Canadian, Australian and New Zealand Dollars. However, the slight bullish drift of recent days and weeks has paid off predictively, with a meaningful move up to a new 10-month high price on the back of the U.S. Dollar’s weakness following yesterday’s FOMC release. Notably, the price has not managed to truly get above this cluster of resistance levels ending at 1.3167, but provided the price remains above the new support level at 1.3136 and to a lesser extent the level at 1.3114, it will be a bullish sign. I see the level at 1.3114 as more likely to be reliable.
There is nothing due today concerning the GBP. Regarding the USD, there will be releases of Core Durable Goods Orders and Unemployment Claims data at 1:30pm London time.