Last Thursday’s Signals may have given a losing long trade following the small bullish pin candlestick which rejected the support level at 1.3082.
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 1.3044 or 1.3084.
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 1.2951 or 1.2920.
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 last Thursday that technically, the scene was set for a downwards movement, whereas a hawkish surprise looked less likely to produce such a strong upwards movement. Following the first release, I was bearish between 1.3082 and 1.3000. This was a correct analysis and worked out well, with the first release pushing the price down, and with 1.3000 being hit the following morning. The week closed near its low and the price has fallen a little so far this week and is still trading below the psychologically important 1.3000 level. The trend on all time frames is bearish, and this is even following last week’s “hawkish hike” by the Bank of England. There is every reason to take a bearish bias today.
There is nothing important due today concerning either the GBP or the USD.