Yesterday’s signals were not triggered.
Today’s GBP/USD Signals
Risk 0.75% per trade.
Trades must be taken between 8am and 5pm London time today only.
Short Trades
Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.2999 or 1.3044.
Place 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 1.2894 or 1.2816.
Place 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 over the short-term, another test of 1.2815 looked likely.
I took a very weak bearish bias below 1.2894. The Pound seemed generally weak over continuing uncertainty over the terms upon which the U.K. will exit the European Union next March.
This approached worked well yesterday until a sudden rumour that the U.K. and Germany were converging on a Brexit deal pushed the price up by almost 1% within 15 minutes, completely ruining things for the bears. It shows you how sensitive the relative value of the British Pound is to the terms of the British exit from the European Union, and how political developments can ruin a day’s trading in this pair as we approach a possible agreement on a deal.
The picture is now more bullish, with obvious new support at 1.2894. If the price can remain above this level, it is likely to rise again towards yesterday’s highs, so that is the pivotal level to watch today.
There is nothing important due today concerning the GBP. Regarding the USD, there will be a release of ADP Non-Farm Employment Change data at 1:15pm London time, followed by ISM Non-Manufacturing PMI at 3pm, and Crude Oil Inventories at 4pm.