Yesterday’s signals produced a short trade from the bearish engulfing candlestick which rejected the resistance level identified at 1.3584, but this only produced barely the minimum of 25 pips of profit before returning to the entry point to break even.
Today’s GBP/USD Signals
Risk 0.75% per trade.
Trades must be entered between 8am and 5pm London time today only.
Short Trades
* Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.3584 or 1.3666.
* 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 Trade
* Long entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of 1.3500, 1.3456, or 1.3431.
* 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 wrote yesterday that the resistance level at 1.3584 might hold and provide a short trade. This is what happened, however the big support level at 1.3500 has also held, and the Euro now looks more clearly bullish than the Pound. It is going to be very interesting now to see if 1.3500 continued to hold, as if the next move is a break above 1.3584, we will be likely to see a bigger bullish pull back. I have no directional bias while the price remains within this range.
There is nothing due today concerning the GBP. Regarding the USD, there will be a release of PPI data at 1:30pm London time, followed by Crude Oil Inventories at 3:30pm.