Yesterday’s signals were not triggered, as both the nearest key levels were missed by a few pips during the London session.
Today’s GBP/USD Signals
Risk 0.75% per trade.
Trades may only be entered before 5pm London time today.
Short Trade
Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.2934.
Put 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 1.2834, 1.2820, 1.2780, or 1.2755.
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 noted yesterday that there was a higher new support level at 1.2862. I said that if the price tested and rejects that level from above as London opens, I would take a bullish bias today up to 1.2934. This didn’t quite happen, but it was close, with the price rising from an area just above 1.2862 to make the day’s high just 3 pips below the resistance level at 1.2934.
The picture is more bearish today, as we now have a double top at about 1.2934, and we also see the price breaking below a key support level at 1.2859. The Pound has also fallen further against the USD than any other major currency over the past day. These are bearish signs, and there is a long-term bearish trend. The problem for bears is that we have several support levels not far below the current price, which may be difficult to break.
I would take a bearish bias today if the price tries and fails to rise above 1.2859 as the London session gets underway but be careful of the major U.S. data release due later.
There is nothing important due today concerning the GBP. Regarding the USD, there will be a release of Preliminary GDP data at 1:30pm London time followed by Crude Oil Inventories at 3:30pm.