Yesterday’s signals were not triggered, as there was no bearish price action at 1.3044, and because the resistance at 1.3085 was not reached until well after the end of the London session.
Today’s GBP/USD Signals
Risk 0.75% per trade.
Trades must be entered before 5pm London time today only.
Short Trade
- Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.3085.
- Put 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.
- 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 1.3044 or 1.2930.
- Put 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.
- 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 there seemed to be a long-term bullish trend emerging, so I was prepared to take a bullish bias if there was a strong bounce at the nearest support level of 1.2930, or alternatively if the price moved strongly to trade above 1.3000 for an hour or so during the first half of the London session. The latter condition was fulfilled, and the price continued to rise strongly over the rest of the day, so this was a great call.
The price topped out near the start of the Asian session at the resistance level of 1.3085 and looks quite likely to test the new support at 1.3044. There are no key levels below that so a strong fall over today if 1.3044 is broken down is quite possible. However, if there was a strong bullish bounce there, I would take a bullish bias as we could see the price go on to make even higher levels. There is likely to be a lot of movement in this pair today, but it may be affected by the ECB’s release due later.
There is nothing important due today regarding the USD or the GBP.