GBPUSD: Support at 1.2092 holding
Last Thursday’s signals were not triggered as the bullish price action took place some pips lower than the support level which I had identified at 1.2104.
Today’s GBP/USD Signals
Risk 0.75% per trade.
Trades must be taken between 8am and 5pm London time today only.
Long Trade Ideas
Go long following a bullish price action reversal upon the next touch of 1.2092 or 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 1.2280.
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 there was no reason to be bullish and every reason to be bearish, so if the price was below 1.2095 at 9am or 10am London time, I’d see that as a meaningful break down and would take a bearish bias for the day. This was a good call, as the price was not below that level at the either of the specified times, so it was at least enough to help stay out of trouble.
We can now see that the true support level is at 1.2092, and this has continued to hold, suggesting that the price is beginning to bottom out. The British Pound is still obviously weak, the price is probably stabilizing due to the U.S. Dollar taking a hit as the U.S. / China trade dispute worsens. This suggests that when the Dollar recovers, the price will break below 1.2092 to new long-term lower low prices. Therefore, there is still a good reason to take a bearish bias if the price is at or below 1.2082 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 ISM Non-Manufacturing PMI data at 3pm London time.