Yesterday’s signals produced an excellent and profitable short trade, with the resistance level at 1.3217 capping yesterday’s high right to the pip then producing a bearish inside candlestick as an entry signal. The price still looks weak, but it is probably wise to seek at least a partial exit very soon as the price gets close to support levels and threatens to reverse.
Today’s GBP/USD Signals
Risk 0.75% per trade.
Trades must be taken before 5pm London time today, during the next 24-hour period only.
Short Trade
Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.3217.
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
Long entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of 1.3112 or 1.3057.
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
I wrote yesterday that I had a bearish bias as we were seeing more weakness in the British Pound and due to the lack of buying, it looked as if it was going to fall further. This worked out very well, with the price being held cleanly by the resistance level, giving a great short trade. The Pound remains weaker than the Euro and the USD is strong, suggesting that the bearish bias here should be maintained. However, the Bank of England will soon be giving their monthly report which might produce volatile and unpredictable price movement. Nevertheless, I still prefer short trades. Another thing to watch for if there is a further fall in the price is long-term buying as the key psychological level of 1.3000 is reached. This could be confluent with 1.1500 in EUR/USD which might produce a sharp move against the USD.
There is nothing important due today concerning the USD. Regarding the GBP, there will be releases of the Bank of England’s Monetary Policy Summary and Official Bank Rate at Noon London time. The Governor of the Bank of England will also be speaking later at 9:15pm.