Yesterday’s signals were not triggered, as the bearish price action took place above 1.3398.
Today’s GBP/USD Signals
Risk 0.75% per trade.
Trades may only be entered before 5pm London time today.
Long Trades
· Long entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of 1.3362 or 1.32861.
· 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 Trade
· Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.3456.
· Put the stop loss 1 pip above the local swing high.
· Adjust the stop loss to break even once the trade is 20 pips in profit.
· Remove 50% of the position as profit when the price reaches 20 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
I was correct yesterday in forecasting that if the price was above 1.3450 at 9am London time, it would probably go higher. It went up quite a lot higher, beyond the nearest former resistance level at 1.3398, which has now been invalidated. The big picture is a little mixed, but marginally bearish. There is no long-term trend, and the medium-term picture is dominated by bearish trend lines, although the price has also found a new, higher support level at 1.3362 which might hold. The next short-term movement looks highly uncertain. The best approach will probably be fading price extremes and expecting support and resistance levels to hold, in these conditions. This pair has the most volatility of any major Forex currency pair, so is attractive to trade if you can get the timing right.
There is nothing important due today concerning the GBP. Regarding the USD, there will be a release of Building Permits data at 1:30pm London time.