GBPUSD: Extremely bearish 2-year low
Yesterday’s signals would have produced a small losing long trade at 1.2280.
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
Long entry following a bullish price action reversal upon the next touch of 1.2104 or 1.2000.
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 Ideas
Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.2212 or 1.2280.
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 price was being held up by support at 1.2364 but if that broke and the price was below 1.2350 at 9am or 10am London time today, I was ready to take a bearish bias on this currency pair for the day. This was a great call as the price was below 1.2350 and fell by approximately 200 pips!
This pair is currently driving the Forex market, with the British Pound very weak as markets are starting to see a no deal Brexit as a very real possibility at the end of October. This has sent the Pound tumbling to new 28-month low prices and it is quite likely that the price will fall further, although in these situations, bottoms can come very suddenly and unpredictably.
I would again take a bearish bias today if the price is below 1.2100 at 9am or 10am London time.
There is nothing of high importance due today concerning the GBP. Regarding the USD, there will be a release of CB Consumer Confidence data at 3pm London time.