GBPUSD: Bullish consolidation above 1.2300
Yesterday’s signals were not triggered, as the bearish price action took place a little way above the resistance level identified at 1.2364.
Today’s GBP/USD Signals
Risk 0.75% per trade.
Trades must be entered before 5pm London time today only.
Long Trade Idea
Long entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of 1.2252.
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 Ideas
Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.2393 or 1.2424 or 1.2444.
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 yesterday that there was new higher support at 1.2336 but it looked weak. If it held, that would be a very bullish sign. If it broke down, I still did 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.
This was a good call as the level at 1.2336 broke down, but the price has held up towards the upper end of its current zone in a bullish consolidation. The Pound is strong as there is a good chance now that Brexit could be abandoned or implemented in name only, and also because recent British economic data has been strongly positive. So, I would still only look to take long trades, but the price is a long way from any key support levels at which to find an entry. I would still take a bullish bias if we get a solid bounce following a retracement to the support level at 1.2252.
There is nothing of high importance due today concerning the GBP. Regarding the USD, there will be a release of Crude Oil Inventories data at 3:30pm London time.