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 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 1.3381, 1.3337, or 1.3286.
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.
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 to see some downwards movement after London opened, but that it probably wouldn’t go very far. However, the natural pattern of the market was disrupted by some major news: after initially telegraphing that the outline of a Brexit deal was about to be announced, which made the Pound shoot up for some minutes, the governing Conservative Party’s coalition partner, the DUP, refused to agree to the deal, so the deal was nixed at the last minute, which caused the price to fall back sharply and take out the low of the day. If we zoom out and take a broader view of the chart, it can be seen that there is a classic distribution sell-off pattern at and under 1.3550, with every sign now that the price has further to fall, to at least 1.3381, where it might turn around and find some support.
This pair remains the most volatile of all the major currency pairs, and it has been at the heart of the Forex market for some time as there is so much uncertainty over the terms of the U.K.’s exit from the European Union.
Regarding 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 ISM Non-Manufacturing PMI data at 3pm.