Yesterday’s signals produced a long trade from the bullish engulfing candlestick which rejected the support level of 1.3534, it is probably not going to be a very successful trade, but it is currently in profit. It might be wise to exit at 1.3525 or at least take partial profit there.
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 1.3525 or 1.3601.
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 1.3456.
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.
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 this pair was showing every sign that it will continue to range and consolidate which will make it very difficult to trade except at the extremes after a relatively strong directional move, and even then, only for limited profit targets. Even though the strong Dollar move did push the price down to a new low, I think this was a very accurate forecast of what happened, with the support level at 1.3456 holding strongly and the ranging conditions prevailing. The British Pound is relatively strong: it is stronger than the Euro. I see the next test which will tell us something about this currency pair should come when the price reaches 1.3527. If there is a clear and strong bearish reversal there, things may become more clearly bearish, but it is unlikely that anything will happen today to significantly change sentiment on the GBP. I have no directional bias beyond that.
There is nothing 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 data at 3:30pm.