Yesterday’s signals were not triggered, as none of the key levels were reached that day.
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 1.2940.
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
Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of 1.2782.
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 trading this pair short looked like a wise approach, but I thought that we may get a short-term bullish retracement, but I think it would probably fail at 1.2774 which would give an opportunity for another short trade – I would be bearish there. The area around 1.2774 was indeed pivotal, although it could not hold the price for long as it continued upwards after pausing, so it wasn’t a great call overall. The problem with the British Pound these days is that it is highly susceptible to any news or rumours over a Brexit deal. Yesterday a British government minister hinted that there should be a full deal within the next few weeks, and that helped cause the Pound to rise past 1.2774. Then a few hours ago, we got the news that a deal covering financial services (a very important party of the British economy) had been reached, which saw the Pound rise by almost 1% against the U.S. Dollar, which has been weak itself in recent hours.
The price is currently struggling to break up past the resistance level at 1.2872. However, I find it hard to believe we will not see still higher prices after London opens, at least for a while, so I have a bullish bias today above 1.2885 until the next resistance level at least at 1.2940.
Concerning the GBP, there will be a release of Manufacturing PMI data at 10:30am London time, followed by the Bank of England’s Monetary Policy Summary, Official Bank Rate & Votes, and the Inflation Report 1pm, followed by the usual press conference half an hour later. Regarding the USD, there will be a release of ISM Manufacturing PMI data at 3pm.