Yesterday’s signals were not triggered, as there was insufficiently bearish price action when the price reached the anticipated resistance level at 1.3162.
Today’s GBP/USD Signals
Risk 0.75% per trade.
Trades may only be taken before 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 1.3162.
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
Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.3226 or the bearish trend line shown in the chart below currently sitting at about 1.3250.
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 rose strongly yesterday, with the price breaking above the former resistance level at 1.3162 easily, and flipping it to become the nearest new probable support. The rise seems to be faltering as the price gets close to the next resistance level at 1.3226, and above that there is a medium-term bearish trend line confluent with an important psychological level at 1.3250 which could also be strong resistance.
Despite yesterday’s reasonably strong rise, there is still a pattern of lower highs and lows, and a clear but very wide bearish price channel, marked by the downwards sloping trend lines which can be seen in the chart below. For this reason, I am not ready to turn fully bullish on this pair yet, but will if the price holds up for another day or so.
There is nothing due today concerning the GBP. Regarding the USD, there will be a release of CB Consumer Confidence data at 3pm London time.