Last Thursday’s signals produced a profitable short trade entry from the bearish inside candle break following the rejection of the resistance level identified at 1.4330.
Today’s GBP/USD Signals
Risk 0.75% per trade.
Trades may be taken between 8am and 5pm London time today only.
Long Trades
Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of 1.4092, 1.4058, or 1.4018.
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
Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.4330 or 1.4435.
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 towards the end of last week to identify potential resistance at 1.4330, which was a key inflection level during the period leading up to the Brexit vote in 2016 – it was that long ago since this pair has reached these prices!
There is no reason not to remain bullish, despite the fairly strong sell-off and classic topping formation below 1.4330, as long as any of the support levels between 1.4100 and 1.4000 hold. There is a strong long-term bullish trend with powerful momentum and it is unlikely to be over yet. However, if the price gets established below the psychologically important round number at 1.4000, that would be a very bearish sign indicating that we might not see 1.4330 again for a long time.
There is nothing important due today concerning either the GBP or the USD.