GBPUSD: Less bullish as no deal Brexit becoming more likely
Yesterday’s signals were not triggered, as there was insufficiently bullish price action at 1.2195.
Today’s GBP/USD Signals
Risk 0.75% per trade.
Trades may only be taken before 5pm London time today.
Long Trade Idea
Long entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of 1.2179.
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
Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.2252.
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 saw the situation here as bullish going forward provided that the level at 1.2195 continued to hold. If 1.2252 held also, that would be even more bullish.
I was ready to take a bullish bias following a firm bounce at either of the nearby support levels.
The price fell sharply yesterday on news that the British government would be using a constitutional procedure to suspend Parliament for 23 days, making it much more difficult for Parliament to act to prevent a “no deal” Brexit which is legally due on 31st October unless an alternative is agree. However, the support at 1.2195 held, even though the support at 1.2252 broke down, which is a mildly bullish sign.
Despite the long-term bearish trend, I am weakly bullish on the British Pound, as I think the new hard line taken by the British government on Brexit will make some form of deal more likely to be agreed before 31st October.
There is nothing of high importance due today concerning the GBP. Regarding the USD, there will be a release of Preliminary GDP data at 1:30pm London time.