Yesterday’s signals produced a profitable short trade from the doji/pin candlestick which rejected the resistance level identified at 1.3250.
Today’s GBP/USD Signals
Risk 0.75% per trade.
Trades must be entered before 5pm London time today only.
Long Trade
Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of 1.3159.
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.
Short Trade
Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.3249.
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.
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 we could probably expect the price to continue to consolidate until Parliament passes something significant later this week. A break above 1.3350 at that stage would be a very bullish sign, conversely, 1.3000 is the level to watch for the start of a major bearish movement.
Applying this analysis would have led to an OK outcome, as the only key support or resistance level which was reached (the resistance at 1.3250) held and the price is now close to the support level at 1.3189. This is likely to be today’s pivotal level, but even if it breaks down, I doubt we will see much of a downwards move. I expect there will be little directional movement in this pair until we get the important Parliamentary votes tomorrow which could point towards a likely Brexit outcome. Parliament will today vote to extend the Brexit date until at least 12th April.
It is probably best to stand aside here until tomorrow.
There is nothing of high importance due today concerning either the GBP or the USD.