Yesterday’s signals were not triggered, as unfortunately the bullish price action took place a few pips below the support level identified at 1.2951.
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 entry into the zone between 1.3102 and 1.3110.
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 Trade
Long entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of 1.2951.
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 the action was bearish, but it may be that the large round number here at 1.3000 would hold so that was something for bears to watch out for. I would be extremely reluctant to take any long trade however unless there is a strongly bullish bounce at 1.2950. This was a good call as after breaking below the big round number at 1.3000 the price continued down with very strong momentum, before reversing with a strong bullish inflection a few pips below the level I had highlighted at 1.3000. The bullish recovery is stronger in the EUR/USD currency pair, but crucially we see the price here back above 1.3000. If the price can get established above 1.3015 or so then that would be a very bullish sign. However, as we have major data releases for both currencies today, movement can be unpredictable.
Concerning the GBP, there will be a release of Services PMI data at 9:30am London time. Regarding the USD, there will be a release of the ADP Non-Farm Employment Change data at 1:15pm, followed by ISM Non-Manufacturing PMI at 3pm. The Chair of the Federal Reserve will be giving a minor speech at 9pm.