Yesterday’s signals were not triggered, as the level at 1.3178 was not reached until after the London close.
Today’s GBP/USD Signals
Risk 0.75% per trade.
Trades must be taken between 8am and 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 1.3132.
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 1.3178 or 1.3226.
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
Although a longer-term chart such as the daily chart shows a ranging consolidation between 1.3100 and 1.3200 is the main story, drilling down to an hourly chart, as shown below, shows a different story. There are clean swings in the movements, making them very tradeable. The price is now in a consolidating triangle and the supportive trend line joining the lows is looking more likely to produce an eventual bullish breakout than a bearish breakdown. This would be in line with the long-term trend, which is still bullish. However, another failure to exceed 1.3226 could trigger another strong bearish movement. A break above that level, conversely, would be a bullish sign.
Regarding 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 CPI and Retail Sales data at 1:30pm, followed by Crude Oil Inventories at 3:30pm.