Yesterday’s signals produced a profitable long trade following the bullish engulfing candlestick formation which rejected the support level at 1.2818. The price is flat below resistance now, so any remaining profit should have its stop loss moved up.
Today’s GBP/USD Signals
Risk 0.75% per trade.
Trades may only be entered 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 1.2920 or 1.2975.
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 Trade
Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of 1.2846 or 1.2818.
Put 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 would have a bullish bias if the price could get established above 1.2842, but I generally felt more comfortable being long of EUR/USD than this currency pair. This was a good call. The price has continued to rise strongly. Interestingly, the Pound is now looking a little stronger than the Euro. We may well see a bearish pull back now as the EUR/USD has hit resistance, but I would be bullish today above 1.2920, if the price can get established there after London opens.
There is nothing important due today concerning the GBP. Regarding the USD, there will be a release of Crude Oil Inventories data at 3:30pm London time, followed by the FOMC Meeting Minutes at 7pm.