Yesterday’s signals were not triggered, as yesterday’s high was just below the resistance level identified at 1.3174.
Today’s GBP/USD Signals
Risk 0.75% per trade.
Trades may only be entered before 5pm London time today.
Short Trade
- Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.3174.
- 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 1.3082 or 1.3000.
- 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 wrote yesterday that the price was almost exactly halfway between support and resistance, which suggested little directional edge. The resistance level at 1.3174 made its presence felt and the price has fallen slowly but quite steadily over the past day, as the U.S. Dollar recovered. I wrote that the Pound was looking more bearish than the Euro, but the Euro then became more strongly bearish. This pair may move into the foreground today as there are key data releases scheduled for both these currencies. I would take a bearish bias between 1.3082 and 1.3000.
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 the ADP Non-Farm Employment Change data at 1:15pm, followed by ISM Manufacturing PMI at 3pm, Crude Oil Inventories at 3:30pm, and the FOMC Statement and Federal Funds Rate at 7pm.