Yesterday’s signals may have provided a losing short trade following the bearish rejection of the resistance level at 1.3240. The later pin candle rejecting the level was a much better entry, but did not set up until the close of the London session.
Today’s GBP/USD Signals
Risk 0.75% per trade.
Trades must be taken before 5pm London time today.
Long Trade 1
- Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of 1.3167.
- 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 1.3240, 1.3304, or 1.3344.
- 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 price has been held for three consecutive days now by the resistance level at 1.3240, which is proving to be difficult to break. Today will see the monthly major input from the Bank of England, which could have the effect of finally pushing the price up past that resistance, or at least triggering a directional move with some much-increased volatility. The trend is bullish, but this pair has been prone to deep pull backs so I am not very strongly confident that the next move will be upwards. More dovish than expected wording today followed by a strong NFP number tomorrow might in fact trigger a major reversal from 1.3240.
Concerning the GBP, there will be a release of Services PMI data at 9:30am London time, followed by the Bank of England’s Inflation Report, Monetary Policy Summary, Official Bank Rate & Votes at Noon. Regarding the USD, there will be a release of Unemployment Claims at 1:30pm followed by ISM Non-Manufacturing PMI data at 3pm. Inventories at 3pm.