Yesterday’s signals produced a profitable long trade following the bullish doji candlestick which rejected the support level at 1.3117 not long after London opened.
Today’s GBP/USD Signals
Risk 0.75% per trade.
Trades must be taken before 5pm London time today only.
Long Trades
Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of 1.3000 or 1.2951.
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.
Short Trades
Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.3117 or 1.3152.
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.
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 the bulls would probably maintain the upper hand, but first the price needed to break convincingly above the resistance level at 1.3145. I was wrong in my expectation but correct in seeing that as the pivotal level of the day. The price chart below shows a medium-term bearish trend, and there is a long-term bearish trend as well, suggesting that taking a short bias is generally going to be the more profitable approach here. The bearish trend line reinforces this. At the time of writing, it looks as if the price may be breaking below the key support level at 1.3083. If it is still below there and looking bearish at 9am London time, I would take a bearish bias today, as there is plenty of room for the price to fall below that area.
There is nothing important due today concerning either the GBP or the USD.