Yesterday’s signals were not triggered, as none of the key levels were ever reached.
Today’s GBP/USD Signals
Risk 0.75% per trade.
Trades may only be taken between 8am and 5pm London time today.
Short Trades
Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.2676 or 1.2703.
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
Long entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of 1.2600 or 1.2536.
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 the recent rise was not convincing as there was this strong confluence of resistance centred on 1.2700 which had yet to be broken. This was likely to be yesterday’s pivotal level. This was a reasonably good call as the price has remained below 1.2700 and has not even been able to test it.
Despite a general weakness in the USD, we can see the Pound here is struggling to rise and has a weakness of its own. There is a long-term bearish trend line at 1.2700 confluent with a round number and horizontal resistance, so this level is becoming still more pivotal. I would be bearish after a bearish reversal from any first test of 1.2703 and would be more confident in a further fall if the price can break below 1.2600. I would not want to be bullish here even above 1.2700.
There is central bank input due today on the Pound, and although Brexit is a more important factor in affecting the price, we could see the price spike anywhere after the releases come out.
Concerning the GBP, there will be a release of Retail Sales data at 9:30am London time, followed by the Bank of England’s Monetary Policy Summary, and Official Bank Rate and Votes. There is nothing important due regarding the USD.