GBPUSD: Pound flat against resurgent Dollar
Last Thursday’s signals were not triggered, as the bearish price action took place a few pips above 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 1.2639, 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 1.2729.
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 last Thursday that this pair is quite aimless with little trend on any time frame, although the short to medium-term action looked a little bearish. The Pound is prone to weakness, so if the USD began to recover strongly later, I thought that we were likely to see meaningful downwards movement and a test of the nearest support level at 1.2639. However, the price really just consolidated that day, but now looks more bearish after strongly rejecting resistance at 1.2729.
Lower prices look likely today over the short term as the Dollar strengthens, but there is a lot of long-term support below which may hold until the new British Prime Minister takes office in about 3 weeks’ time. If the price falls quite strongly between 8am and 9am London time, I would take a bearish bias until 1.2639.
There is nothing of high importance due today regarding the GBP. Concerning the USD, there will be a release of ISM Manufacturing PMI data at 3pm London time.