Yesterday’s signals were not triggered, as there was no bullish price action at either of the support levels which were reached.
Today’s GBP/USD Signals
Risk 0.75% per trade.
Trades may only be taken before 5pm London time today.
Short Trade
Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.2626.
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
Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of 1.2429.
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 price had just printed a higher “stairstep” support level at 1.2733 which was a bullish sign. The Pound was not particularly strong, I thought that it would be better to be bullish than bearish here, but that the price may not rise much further. The support at 1.2733 was likely to be the day’s pivotal level.
As it happened, the price fell quite sharply over the day, completely reversing the technical picture as the price broke down well below its former bullish channel, and then fell further during the Asian session’s “flash crash”, going all the way down to bounce off the support level at 1.2429 before recovering more than half of the loss. This move back up is a strong recovery but the best that can be said at the time of writing is that there is short-term bullish momentum. After such dramatic movements, it is typically wise to stand aside for a few hours and to let things settle. I have no directional bias here, but I think the nearest resistance level at 1.2626 is likely to hold today.
There is nothing of high importance due today concerning the GBP. Regarding the USD, there will be a release of ISM Manufacturing PMI data at 3pm London time.