GBPUSD: More bearish below 1.2457
Yesterday’s signals produced a long trade from the bullish rejection of 1.2457 but it only made a little more than 20 pips of profit.
Today’s GBP/USD Signals
Risk 0.75% per trade.
Trades may only be entered between 8am and 5pm London time today.
Long Trade Ideas
- Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of 1.2429 or 1.2388.
- 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.
- 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 Trade Idea
- Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.2500.
- 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.
- Remove 50% of the position as profit when the price reaches 20 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 British Pound was one of the weaker currencies, and this pair is in a long-term bearish trend, so if the U.S. Dollar began to strengthen notably, the price was likely to move down here. Nevertheless, there were a few support levels close below, so action was likely to be choppy overall. This was a pretty good call as after an initial bounce at the nearest support level, the price sold off again from 1.2500 and is currently breaking below the former support at 1.2557.
These are all quietly bearish signs. Later today there may be more movement in the price as the result of the British Conservative Party leadership election will be announced which should see a new more solidly pro-Brexit government take office formally tomorrow. It is unclear whether this government can deliver Brexit and the struggles over this issue are going to produce a lot of movement in the Pound over the coming weeks.
I would take a bearish bias in this pair if it can get established below 1.2428 later during today’s London session.
There is nothing of high importance due today regarding the USD. Concerning the GBP, the result of the Conservative Party leadership election will be announced just before Noon London time.