Yesterday’s signals were not triggered, as none of the key levels were ever reached.
Today’s GBP/USD Signals
Risk 0.75% per trade.
Trades may only be taken before 5pm London time today only.
Long Trade 1
Long entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of 1.3226.
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 1.3344.
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 Bank of England is expected to raise its rate of interest by 0.25% to 0.75% later today. If the Bank passes on the rise and does not hike, we can expect this pair to fall sharply. The U.S. Dollar has gained some strength over recent hours following President Trump’s announcement of the next Chair of the Federal Reserve, who is widely expected to pursue a more hawkish monetary policy than the current Chair Janet Yellen.
The technical picture is interesting, with a long-term bullish trend still intact, a cyclical double top above, and a broken trend line confluent with horizontal support and a key psychological level all happening from about 1.3225 to 1.3250. This might be an excellent area in which to enter a long trade, particularly after any sudden downwards spike. If the price gets below 1.3225 and stays there, it would be a bearish sign.
If the rate hike goes ahead as expected, it is harder to forecast where the price will go as it is probably already largely priced in. Probably the price will rise at least to the recent highs. If it fails there convincingly, that will also be a bad sign for long-term bulls.
Concerning the GBP, there will be a release of Construction PMI data at 9:30am London time, followed at Noon by the Bank of England’s Inflation Report, Monetary Policy Summary, Official Bank Rate and Votes. The Governor of the Bank will be speaking half an hour later. Regarding the USD, there will be a release of Unemployment Claims data at 12:30pm.