Yesterday’s signals were not triggered, as unfortunately the bullish price action took place a few pips below the 1.3151.
Today’s GBP/USD Signals
Risk 0.75% per trade.
Trades may only be taken until 5pm London time today.
Long Trades
- Long entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of 1.3151 or 1.3019.
- Place 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.
- Remove 50% of the position as profit when the price reaches 25 pips in profit and leave the remainder of the position to run.
Short Trades
- Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.3350, 1.3350 or 1.3482.
- Place 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.
- 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 I maintained a medium-term bullish bias and thought that a strong break above 1.3350 will be very significant but will probably only follow through once some major news about Brexit arrives.
The Pound has turned more bearish, without a doubt. This can be seen in the fact that almost every currency had a move up against a notably weaker U.S. Dollar as the Federal Reserve announced a more dovish approach to rate hikes before 2020. Yet the Pound did not advance and is falling as the London session gets underway.
The weakness in the Pound is due to the fact that the British Prime Minister spoke to the country last night and took a harder stance on Brexit, appearing to draw a red line at a June departure date, with or without a deal. This makes it increasingly likely that Brexit will be resolved next week as the 29th March legal deadline approaches. The Prime Minister is in an extremely weak position and the Pound is being sold, so I would be wary of taking any long trades today.
A sustained break below 1.3150 would be a bearish sign, so I would take a bearish bias if there are two consecutive hourly closes below 1.3150 during the London session today.
Concerning the GBP, there will be a release of Retail Sales data today at 9:30am London time, followed by the Bank of England’s Monetary Policy Summary, Official Bank Rate and Votes release at Noon. There is nothing due today regarding the USD.