Yesterday’s signals produced a short trade following the bearish rejection of the resistance level at 1.2879, which may have been a profitable trade depending upon the tightness of the stop loss and the broker price feed. The action still looks quite bearish, so it might be wise to allow any open trade to run further.
Today’s GBP/USD Signals
Risk 0.75% per trade.
Trades may only be taken 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 1.2879.
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 1.2616.
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 level at 1.2879 was looking pivotal and still attractive for a potential short trade. This was a good call as the level acted as strong resistance. The picture looks more bearish now, with possible new lower resistance developing at 1.2805. Much will depend on British political developments which are prone to surprises, but it still looks likely that the British government will not get its Brexit deal ratified and that will have dramatic consequences for the Pound in either direction depending upon whether the eventual outcome in no deal or no Brexit.
There is nothing important due today concerning the GBP. Regarding the USD, there will be a release of Core Durable Goods Orders at 1:30pm London time.