Yesterday’s signals produced a long trade entry following the bullish engulfing candlestick rejecting the support level at 1.3525. As risk should already be eliminated by now, the trade can be left to run, in the same direction as the long-term bullish trend.
Today’s GBP/USD Signals
Risk 0.75% per trade.
Trades may only be taken between 8am and 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 1.3525 or 1.3456.
· 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 1.3657.
· 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 identifying the 1.3525 area as likely to be strong support. The most technically interesting feature of the recent trading is that the Pound is behaving much more strongly than the Euro, even in the absence of any key news drivers, so this pair is quite likely to be more interesting to trade today than the EUR/USD. This pair is back in a long-term bullish trend, and if 1.3500 holds, is still likely to go on to make new highs soon, even though there is selling when the price gets near to 1.3600.
There is nothing important due today concerning either the GBP or the USD.