Yesterday’s signals were not triggered as there was no bullish price action at either 1.2950 or 1.2918.
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 1.2756.
- 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 1.2918 or 1.2950.
- 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
Yesterday’s weak British inflation data release was the trigger to send the Pound down and to finally end the long-term bullish upwards trend in this pair. The price easily cut through the crucial support level of 1.2950. There is more British economic data due today, but the main event is going to be the FOMC release later. A strong release for the Dollar should push the price of this pair down even further, easily. Trading in recent hours also looks bearish, with sellers ready to drive the price down, so a meaningful fall could happen during the early hours of the London session even before the FOMC release.
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 Building Permits data at 1:30pm, followed by Crude Oil Inventories at 3:30pm and FOMC Meeting Minutes at 7pm.