Yesterday’s signals were not triggered as the move down from 1.3117 was too spiky, however the level did act as accurate resistance.
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
- Long entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of 1.2950.
- Place the stop loss 1 pip below the local swing low.
- Move the stop loss to break even once the trade is 25 pips in profit.
- Take off 50% of the position as profit when the price reaches 25 pips in profit and leave the remainder of the position to ride.
Short Trades
- Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.3117, 1.3136, or 1.3167.
- Place the stop loss 1 pip above the local swing high.
- Move the stop loss to break even once the trade is 25 pips in profit.
- Take off 50% of the position as profit when the price reaches 25 pips in profit and leave the remainder of the position to ride.
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
I predicted yesterday that as “we have a cluster of levels above 1.3117, it is likely to be an area that will be difficult for the price to break.” In fact, the price was just testing the first level in this cluster at 1.3117 when weaker than anticipated British inflation data was released, which sent the price downwards in a sharp spike. The fall did not follow through and the price has moved mostly sideways since. The result is that we still have all the same key levels intact. It looks as if this pair is likely to move sideways today so there will probably be better opportunities elsewhere.
There is nothing due today concerning the GBP. Regarding the USD, there will be a release of Building Permits data at 1:30pm London time, followed by Crude Oil Inventories at 3:30pm.