GBPUSD: Weakly bullish above 1.2336
Yesterday’s signals produced a profitable long trade from the bullish rejection of the support level identified at 1.2252. It would probably be wise to take most of any floating profit off the table by now.
Today’s GBP/USD Signals
Risk 0.75% per trade.
Trades may only be taken 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 1.2252 or 1.2169.
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 1.2364 or 1.2424.
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 with the suspension of the British Parliament for 5 weeks, the political situation in the U.K. is likely to be more stable until mid-October. For this reason, I thought that we would get a period of consolidation in this currency pair now. I saw the day’s pivotal point as 1.2252 but I saw it as more likely to break down than hold.
I was correct at least about 1.2252 being the day’s pivotal point, as the bullish bounce there gave a steady rise over the day and a profitable long trade entry.
There is new higher support at 1.2336 but it looks weak. If it holds, that will be a very bullish sign. If it breaks down, I would still not want to take any short trades in this currency pair yet but would look instead for another bullish bounce and a long trade re-entry at 1.2252.
There is nothing of high importance due today concerning either the GBP or the USD.