Yesterday’s signals were not triggered as the bullish price action took place below 1.3250.
Today’s GBP/USD Signals
Risk 0.75% per trade.
Trades must be taken between 8am and 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.
- 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
- Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.3296 or 1.3344.
- 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
Short-term forecasts are difficult right now. What is clear is that the British Pound is obviously weaker than the Euro and Japanese Yen, so is finding it difficult to rise against the U.S. Dollar which has sold off after enjoying a run for a few days. I mentioned yesterday that 1.3250 might provide some support and in a small way it has. There is a long-term bullish trend but sentiment is pretty negative on the Pound so it is hard to see it coming back soon. There are major data releases for both sides of the pair today, which is another uncertain factor, so overall, I have no short-term bias. One technical feature is worth watching out for: the confluence of resistance and a medium-term bearish trend line at about 1.3344, which could produce a nice short trade entry if the price gets there then reverses bearishly.
Concerning the GBP, there will be a release of Services PMI data at 9:30am London time. Regarding the USD, there will be a release of the ADP Non-Farm Employment Change Forecast at 1:15pm, followed by ISM Non-Manufacturing PMI at 3pm, Crude Oil Inventories half an hour later, and then finally Janet Yellen opening a conference at 8:15pm.