Yesterday’s signals were not triggered as none of the key levels were ever reached, although the anticipated resistance at 1.2918 was just a couple of pips above the high of the day.
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 1.2756.
- 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 1.2918 or 1.2950.
- 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
Recent weeks have shown a clear pattern: a fall in price, new resistance above holding the price down, a consolidation, another drop, and on and on. The price now continues to consolidate in an area below 1.2918. A retest of that level would probably provide an excellent short trade entry. A renewed drop, all the way down to the 1.2750 area, looks likely upon any serious renewal in U.S. Dollar strength.
Despite the general weakness of the British Pound, and the persistence of 1.2918 as solid resistance, it is beginning to look significant that there is a bid in the 1.2850 area, and it is looking more possible that we may have a medium-term bottoming out of the price happening here. However, I still maintain a bearish bias.
There is nothing due today concerning either the GBP or the USD.