Yesterday’s signals were not triggered, as the bearish price action took place a little way above the resistance level at 1.2959.
Today’s GBP/USD Signals
Risk 0.75% per trade.
Trades must be entered between 8am and 5pm London time today only.
Long Trades
- Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of 1.2877 or 1.2828.
- 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.
- 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 Trades
- Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.2963 or 1.3005.
- 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.
- 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 break below 1.2959 has happened and has made the situation here significantly more bearish. If we got a new low from the hourly close at 9am London time on above-average volatility, I was ready to take a bearish bias to at least 1.2877, and also following a strong bearish reversal after a retrace to 1.2959.
The price in fact rose during the early part of the London session, to just a few pips above 1.2959, before turning bearish as the U.S. Dollar strengthened notably against almost every currency. The downwards movement by the Pound is not especially strong, as the Pound is no longer the focus of the Forex market because the Brexit question has been postponed for a few months.
The trend is definitely bearish, but this is probably going to be better exploited in the EUR/USD currency pair than here.
There is nothing important due today concerning the GBP. Regarding the USD, there will be a release of Core Durable Goods Orders at 1:30pm London time.