Yesterday’s signals produced a profitable short trade following the early bearish rejection of the resistance level at 1.3085. However, this trade only gave a little more than the minimum 25 pips of profit.
Today’s GBP/USD Signals
Risk 0.75% per trade.
Trades may only be taken before 5pm London time today only.
Short Trades
Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.3143 or 1.3162.
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
Long entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of 1.3085 or 1.3029.
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 there was still short-term bullish momentum here, with the Pound relatively strong on optimism over a Brexit deal prevailing. However, this upwards movement runs into a long-term downwards trend and a cluster of resistance levels which might halt the advance.
It looked as if 1.3035 would probably be the pivotal level. This was only a few pips off the low of the day.
The chart below shows the Pound has risen strongly and consistently since the start of the month and with Dollar weakness continuing, it looks like being likely to be a bullish environment today. However, momentum may be slowing, and there are two resistance levels close by overhead. If the price breaks strongly above 1.3162 it would have no resistance to stop it running much further, so this would be a very bullish sign. It is quite likely that the price will consolidate below that area until the FOMC release due tomorrow. I would take a bullish bias above 1.3162 today.
There is nothing important due today concerning either the GBP or the USD.