Yesterday’s signals were not triggered, as there was no bullish price action at 1.2963.
Today’s GBP/USD Signals
Risk 0.75% per trade.
Trades may only be entered between 8am and 5pm London time today.
Long Trade
- Long entry at 1.2828.
- Put 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 1.2970 or 1.3041.
- Put 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 recent price action had created a more bearish picture, but this pair was best described as within a long-term range, with no real long-term trend. This meant that the best approach to trading this currency pair would most probably be fading rejections of price extremes and taking relatively conservative profit targets.
This was partially a good call insofar as I noted the increasing bearishness. The level at 1.2970 now looks very pivotal as new resistance, and the short-term price action looks convincingly bearish too. The price looks likely to fall further, but there is key U.K. economic data due early in the London session which might produce a surprising mood. If the price rejects 1.2970 and acts bearishly in the hour following the U.K. data release, I would take a bearish bias on this pair.
The price has a long way it may fall before finding any key support levels. Below 1.2900, we would be in the territory of a long-term bearish trend.
There is nothing important due today concerning the USD. Regarding the GBP, there will be a release of Average Earnings Index data at 9:30am London time.