Making a new 4-month low
Yesterday’s signals were not triggered as none of the key levels were ever reached.
Today’s GBP/USD Signals
Risk 0.75% per trade.
Trades may only be entered between 8am and 5pm London time today.
Long Trades
Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of 1.2697 or 1.2618.
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 1.2828.
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 Pound looked slightly more bullish than the Euro, but overall this pair still looked bearish and the odds were still in favour of stronger movement downwards than upwards. I was bearish below the psychological level at 1.2750 at least until 1.2700 where support may be felt. This was a good call as the price has continued to descend and make new lows. There is again every reason to be bearish today, but we are now very close to a confluence of support and a round number at 1.2700 which is likely to be today’s pivotal level. If the price closes below 1.2700 at 9am London time and above-average volatility, I would take a bearish bias – if not, I think we are more likely to see a bullish retracement over at least part of the London session.
There is nothing important due today concerning the USD. Regarding the GBP, there will be Inflation Report Hearings at 9:30am London time.