GBPUSD: More bearish on no deal Brexit U.K. election showdown
Yesterday’s signals were not triggered, as there was no bullish price action at either of the support levels when they were reached.
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 1.2000 or 1.1900.
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 1.2105 or 1.2169.
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 the technical picture was now more bearish. If the resistance level at 1.2169 held as we get into the London session, I thought that the price would probably fall again over the day. This was a good call as the price has been dropping very strongly ever since the price hit 1.2169 during yesterday’s Asian session.
The price finally seems to have found at least a short-term bottom after hitting the big psychological round number at 1.2000 a little while ago. If this breaks down, we could see a further strong fall to 1.1900 or even lower.
Opposition parties in the British Parliament will try today to vote to effectively give the European Union a veto over Brexit, and the vote may succeed with help from pro-Remain Conservative MPs. The government has countered by saying if such a vote passes it will call an immediate general election and fire all any rebels. The election would take place before the current Brexit date of 31st October and would probably result in a more pro-Brexit Parliament.
These political developments today are likely to have a major effect on the Pound. Anything that makes Brexit or a no deal Brexit more likely will sink the Pound, and vice versa.
Concerning the GBP, the British Parliament will probably be voting on giving the EU a veto over the terms of Brexit. Regarding the USD, there will be a release of ISM Manufacturing PMI data at 3pm London time.