Last Thursday’s signals were not triggered, as the bearish price action took place a little way below 1.3020.
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 1.3217.
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 1.3023.
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 last Thursday that the major level to watch would probably be the resistance at 1.2951. If the price could get established above it, then we would be likely to see more of a recovery. This was a good call as although I was cautious, the price has continued to rise quite strongly. The technical picture is now much more bullish, and there is an interesting divergence between the British Pound and the Euro, with the latter currency looking bearish. The short-term price action is bearish, so we may get a bearish retracement now over the coming hours. It is likely to be a relatively quiet trading day anyway, with the USA on holiday today. I would be more bullish this week, but the time is probably not yet right to be entering any long trades today or any trades at all really.
There is nothing important due today concerning either the GBP or the USD. It is a public holiday today in the USA.