GBPUSD: Bearish below 1.2088
Last Thursday’s signals were not triggered, as none of the key levels were reached that day.
Today’s GBP/USD Signals
Risk 0.75% per trade.
Trades must be taken between 8am and 5pm London time today only.
Long Trade Idea
Go long following a bullish price action reversal upon the next touch of 1.2000.
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 Idea
Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.2088.
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 the price was still being supported from 1.2092, but still looked quite heavy and likely to eventually fall below that level and to drop more, to the 1.2000 area. However, I thought that this break was more likely to happen on Friday rather than Thursday and I was correct.
We now have the former support at 1.2092 flipped to become new resistance just a few pips lower at 1.2088. The price has come to within about 15 pips of the big psychological level at 1.2000. There is no doubt that the picture is technically bearish, but there is a question as to whether bears are going to be able to get the price established below 1.2000 – there could well be long-term buyers stepping in here to prop the price up.
I would take a bearish bias today if the price is below 1.2000 at 9am or 10am London time, or if there is a bullish retracement which produces a firm bearish reversal at 1.2088.
There is nothing of high importance due today concerning either the GBP or the USD.