Yesterday’s signals were not triggered, as there was insufficiently bearish price action at 1.3073.
Today’s GBP/USD Signals
Risk 0.75% per trade.
Trades must be taken prior to 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 at the next touch of 1.3005 or 1.2963.
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 1.3093 or 1.3122.
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 short-term (price) movement suggested that we were likely to see a bearish retracement as London opened, so a test from above of the 1.3000 area was quite likely. I was wrong to anticipate that as the move of the London session was upwards, and the support at 1.3005 was never reached. It would have been better to look at the previous day’s strong price rise and to rely on that.
The price managed to rise yesterday to 1.3100 but sold off from there. It continued to trade bearishly during the Asian session as the Dollar recovered but may be stabilizing now.
It is hard to say what will happen next as there is no long-term trend in this pair, and it is trading within its multi-week range.
There is central bank input soon concerning the Pound which could push the price anywhere, so in addition to the uncertain technical situation, there is another reason to stand aside from trading this pair until the New York session later today.
There is nothing important due today concerning the USD. Regarding the GBP, there will be a release of the Bank of England’s Monetary Policy Summary, Official Bank Rate, and Inflation Report at Noon London time, followed by usual press conference half an hour later.