Yesterday’s signals were not triggered, as there was no bearish price action at 1.3839.
Today’s GBP/USD Signals
Risk 0.75% per trade.
Trades may only be taken between 8am and 5pm London time today.
Long Trade
Long entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of 1.3657.
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 1.4000.
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
I was correct yesterday in taking a bullish bias, and in implying the situation would remain more bullish if the price stayed above 1.3725. The price rose over the day, eventually spiking up as high as 1.3950, a new 18-month high price, before falling back quite strongly. There are two interesting developments: the action over the day was more bullish than it was in EUR/USD, which tells us that the Pound may now be coming back into focus, and support is more obviously holding up here compared to EUR/USD. Coupled with the long-term bullish trend, this suggests it will be correct to maintain a bullish bias here. The problem is that the support level shown in the chart below at 1.3807 looks weak, and the other nearest key support and resistance levels are beyond what we might expect the price to reach today. However, I think the price is more likely to rise over the course of today than fall. If it reached 1.40 over the coming days, that will be a very big psychological milestone for the Pound.
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, followed by Crude Oil Inventories at 4pm.