GBPUSD: Triangular consolidation centred on 1.2500
Yesterday’s signals produced a nicely profitable long trade from the bullish pin candlestick which rejected the support level identified at 1.2429 right at the open of yesterday’s London session. It would probably be wise to exit the trade now for profit as the price is ranging near the middle of a triangular consolidation range.
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 1.2562.
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 I would hold off from looking for any trades here except perhaps a short from a failure to break above 1.2500. Whilst this was a good call insofar as the price tried and failed to get established above 1.2500, the real action of the day was the bullish move from the supportive double bottom at 1.2429.
A new government has taken office in the U.K. and is clearly taking a harder line on Brexit, but the new Prime Minister spoke of a “no deal” Brexit as “remote”, signalling a renewed intention to strike a deal with the E.U. However, it is an open question whether the E.U. will modify its previous offer and the fate of the Pound is very likely now to hinge on how the market sees the answer to this question on a day-to-day basis.
Until this issue becomes clearer, it looks as if this currency pair will consolidate within the triangle shown in the price chart below. Direction looks unclear now so I would stand aside until we get a break of this triangle in one direction or the other.There is nothing of high importance due today regarding the GBP. Concerning the USD, there will be a release of Core Durable Goods Orders at 1:30pm London time.