GBPUSD close to 3-month low as Brexit deadlock remains
Yesterday’s signals produced both a very profitable short trade from the rejection of 1.2924 and a long trade from the bullish outside candlestick which rejected the support level at 1.2828. This long trade will still be open and although the Pound is weak, may still move into profit today. However, a break below yesterday’s lows will be a bearish sign.
Today’s GBP/USD Signals
Risk 0.75% per trade.
Trades may only be entered before 5pm London time today.
Long Trade
Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of 1.2828.
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 run.
Short Trade
Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.2924.
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 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 picture now looked more bearish as the long-term low at about 1.2900 was in danger, and the price had printed new lower resistance at 1.2924. This was a good call as the price fell further after failing at the resistance level of 1.2924. This pair now looks even more bearish as it made a 50-day low close and is close to making a new 3-month low: the only obstacle in the way is the key support level at 1.2828. If the price can get established below this level, closing below there for a couple of hours consecutively, I would take a bearish bias today. This is likely to be today’s key pivotal point and if it continues to hold, the price is going to make a bullish retracement.
There is nothing important due today concerning either the GBP or the USD.