GBPUSD: Modest recovery from last week’s 27-month low price
Last Thursday’s signals may have produced a losing short trade from the bearish rejection of the resistance level at 1.2495.
Today’s GBP/USD Signals
Risk 0.75% per trade.
Trades must be taken prior to 5pm London time today only.
Long Trade Ideas
Long entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of 1.2457, 1.2429, or 1.2388.
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 Ideas
Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.2562 or 1.2587.
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
Despite last week’s strong and sharp fall to a new 27-month low price, the Pound has stabilized and even risen a little which was possibly helped by the British Parliament’s passing of a motion attempting to block a “no deal” Brexit, which is giving the markets hope that the new U.K. government will be a little less likely to leave the E.U. on “no deal” terms at the end of October. The winner of the Conservative Party leadership contest will be announced tomorrow and should then take office as Prime Minister on Wednesday. This could produce some volatility in the Pound.
The Pound is one of the weaker currencies, and this pair is in a long-term bearish trend, so if the U.S. Dollar begins to strengthen notably, the price is likely to move down here. Nevertheless, there are a few support levels close below, so action is likely to be choppy overall. I’d strongly consider standing aside from trading this pair today for that reason, but it could be very interesting tomorrow and later in the week.
There is nothing of high importance due today regarding either the GBP or the USD.