Yesterday’s signals produced a profitable long trade from the bullish near-pin candlestick which rejected the support level identified at 1.3221, making something close to the minimum profit before returning to the entry point to be stopped out at break even on the remainder.
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 1.3293 or 1.3344.
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 1.3221 or 1.3112.
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 took a bearish bias yesterday, noting that there was no support until 1.3221 so the price could fall quite a long way if it does move down. This was right on the money and a great forecast. After climaxing at the 1.3221 level, the price has consolidated, and now appears to be stuck between that support and new resistance at 1.3293. I remain bearish below 1.3300, but I think that unlike the EUR/USD it may be difficult for this pair to move much lower right away, unless there are releases of U.S. data which are excessively positive compared to the market’s expectations, because the price has now reached an area of long-term consolidation between about 1.3000 and 1.3221. Of course, further bad news from Italy on the Euro could also drag down the Pound and override the technical.
There is nothing due today concerning the GBP. Regarding the USD, there will be a release of ADP Non-Farm Employment Change data at 1:15pm London time.