Last Thursday’s signals provided an excellent short trade entry following the bearish doji break down after the rejection of the resistance level identified at 1.3997. The price may fall further, but it seems to be finding some support now at 1.2759.
Today’s GBP/USD Signals
Risk 0.75% per trade.
Trades must be entered between 8am and 5pm London time today.
Short Trades
Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.3822 or 1.3879.
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.
Long Trades
Long entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of 1.3759 or 1.3657.
Place the stop loss 1 pip below the local swing low.
Move the stop loss to break even once the trade is 25 pips in profit.
Take off 50% of the position as profit when the price reaches 25 pips in profit and leave the remainder of the position to ride.
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
Last Thursday I was correct in expecting this pair to get dragged along with the movement in EUR/USD, that is exactly what happened, and it fell accordingly after rejecting the resistance just below 1.4000. On Friday, there was a further fall, which was stronger and Pound-driven, following the very poor U.K. GDP data release which showed an increase of only 0.1%. The Pound now looks relatively weak, although it seems to have stopped falling and may be making a bullish retracement. However, if the Dollar starts to advance again, it looks as if it is going to be most forcefully expressed in this currency pair of all the major pairs. I have no directional bias today.
There is nothing due today concerning either the GBP or the USD.