GBPUSD: Pound weakens against resurgent Dollar
Yesterday’s signals were not triggered, as there was no bullish price action at 1.2709.
Today’s GBP/USD Signals
Risk 0.75% per trade.
Trades must be entered before 5pm London time today only.
Long Trades
Long entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of 1.26389, 1.2610, or 1.2606.
Place 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.
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 Trade
Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.2709.
Place 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.
Take off 50% of the position as profit when the price reaches 20 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 if the price could close at a new high above 1.2760 at 9am London time, I would see this as a definite bullish sign that we would get higher prices still over the course of this day. However, I was nervous of the Pound’s vulnerability and so think that using EUR/USD instead for a long trade would be a better bet now.
This was a good call in a negative way, as the 9am close below 1.2760 presaged yesterday’s bearish movement.
The USD has strengthened, and the Pound has been one of the weaker currencies, so a short trade or short bias here seems to make sense today in the current market environment. However, it may well be that the price bottoms out at or close to 1.2639 as that level looks to be very supportive.
I take no directional bias and think that today’s movement might be choppy overall.
Regarding the GBP, there will be Inflation Report Hearings at 10:15am London time. Concerning the USD, there will be a release of Core Durable Goods Orders data at 1:30pm.