Yesterday’s signals were not triggered, as there was insufficiently bearish price action at 1.3293.
Today’s GBP/USD Signals
Risk 0.75% per trade.
Trades may only be taken before 5pm London time today.
Short Trades
Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.3344 or 1.3409.
Place the stop loss 1 pip above the local swing high.
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.
Long Trades
Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of 1.3265 or 1.3221.
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
Yesterday I wrote that I remained bearish below 1.3300, but I thought that unlike the EUR/USD it may be difficult for this pair to move much lower right away, unless there were releases of U.S. data which are excessively positive compared to the market’s expectations, because the price had now reached an area of long-term consolidation between about 1.3000 and 1.3221. The surprise was in the other direction, with a strong rise in the Euro due to Italian political reasons. This made the Pound rise somewhat against the U.S. Dollar, print higher support, and break resistance, yet what truly stands out here is how weak and unconvincing this rise in the Pound looks. It therefore seems that this pair is poised to fall strongly when the Dollar comes back, especially if that happens any time soon – tomorrow’s NFP related data looks likely to be a possible trigger. For this reason, I would look to trade this pair short once it starts making convincing new lows, although the lows do approach an area of prior consolidation, so it would probably be wise to be conservative in taking profits. I have a bearish bias below 1.3265.
There is nothing due today concerning the GBP. Regarding the USD, there will be a release of Crude Oil Inventories data at 4pm London time.