Yesterday’s signals were not triggered, as the eventual bullish price action took place a little below 1.2820.
Today’s GBP/USD Signals
Risk 0.75% per trade.
Trades may only be entered before 5pm London time today.
Short Trades
Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.2894 or 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 1.2816, 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 wrote yesterday that the situation still looked bearish but was worth being cautious as there were two key support levels close to the current price, and we had major data for both currencies arriving later today which could push the price anywhere, with volatility.
This was a fairly good call as the price moved down before recovering quite strongly later in the day.
The picture remains bearish, with the price chart below showing lower highs and lower lows. The problem for bears is the three support levels above 1.2750 that will probably do a good job of slowing down any further downwards push. Over the short-term, another test of 1.2815 looks likely. However, there is a major British economic data release soon, which could push the price in an unexpected direction.
I take a very weak bearish bias below 1.2894. The Pound is generally weak over continuing uncertainty over the terms upon which the U.K. will exit the European Union next March.
Regarding the GBP, there will be a release of Services PMI data at 9:30am London time. There is nothing important due today concerning the USD.