Last Thursday’s signals may have produced a potentially very profitable long trade from 1.3057, but the bullish price action wasn’t quite right for an entry.
Today’s GBP/USD Signals
Risk 0.75% per trade.
Trades may only be taken between 8am and 5pm London time today, during the next 24-hour period.
Short Trades
Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.3216 or 1.3309.
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
Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of 1.3129, 1.3105, or 1.3057.
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
There are wide swings in this pair, with bullish episodes, which is quite similar to what we have seen in the highly correlated EUR/USD currency pair over recent days. However, the swings are making new low prices, which suggests the GBP is weaker than the EUR. Nevertheless, a look at higher time frame price charts show that the daily and weekly candlesticks are producing long lower wicks, which suggests that the price is finding it hard to move further down, and it seems clear this is caused by the stronger support we see whenever the price gets anywhere near the psychologically key 1.3000 level. So, although there is a long-term bearish trend, I think it is very possible that we will not see a price below 1.3050 or certainly 1.3000 for a long time, which implies the best trade to look for might be a long at 1.3057. The short-term price action suggests that the price will now move down to 1.3129, but I have no directional bias today on this currency pair.
Concerning the GBP, there will be a release of Manufacturing PMI data at 9:30am London time. Regarding the USD, there will be a release of ISM Manufacturing PMI data at 3pm.