GBPUSD: Slightly bearish below 1.2140
Yesterday’s signals were not triggered, as there was no bullish price action at 1.2138.
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 on the H1 time frame immediately upon the next touch of 1.2094 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 1.2140 or 1.2210.
- 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 it was hard to say how much further the current bullish movement could go, but as long as 1.2138 held, I thought that the price certainly looked likely to rise higher.
This was a good call as the price quickly broke below that level, and the action turned bearish, with the price still holding below 1.2140 just a couple of pips away which is the new “flipped” lower resistance level.
We have a more bearish outlook, but the price is really caught between bulls and bears without a very clear direction. There is a long-term bearish trend, but the price is still too far off its recent lows for bears to be confident.
I would stand aside from this pair for another day and see how things develop. It looks too evenly balanced to trade, but if I had to pick a direction, I think a down day will be more likely than an up day today.
There is nothing of high importance due today concerning either the GBP or the USD.