Yesterday’s signals produced an excellent, profitable short trade following the bearish engulfing candle rejecting the resistance level at 1.3016 just after London opened. It would probably make sense to take most of the profit now.
Today’s GBP/USD Signals
Risk 0.75% per trade.
Trades must be taken before 5pm London time today only.
Long Trades
- Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of 1.2950 or 1.2918.
- 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 Trades
- Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.3016 or 1.3061.
- 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 Pound is still weak and bearish, yet the support level at 1.2950 is very strong and therefore we are seeing the price remaining stuck between 1.3016 and 1.2950, as it has been for an entire week now. This currency pair is arriving at a crucial point, after being in this narrow range for so long, suggesting we will get a strong breakout soon. This could be triggered by any surprise in today’s British CPI data, or by the FOMC release tomorrow affecting the U.S. Dollar. It is worth watching for a breakout here, and a break below 1.2950 will mark the end of the long-term bullish trend, and be very technically significant if it happens.
Concerning the GBP, there will be a release of CPI data at 9:30am London time. Regarding the USD, there will be a release of Retail Sales data at 1:30pm.