GBPUSD: More bullish as British Parliament votes to stop Brexit
Yesterday’s signals were not triggered, as there was not appropriate price action when 1.2000 and 1.2105 were reached.
Today’s GBP/USD Signals
Risk 0.75% per trade.
Trades must be entered before 5pm London time today only.
Long Trade Ideas
Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of 1.2077, 1.2051, 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 Ideas
Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.2169 or 1.2252.
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 political process over the day in the British Parliament was likely to have a major effect on the Pound. Anything that made Brexit or a no deal Brexit more likely would sink the Pound, and vice versa.
This was a good call, as the price initially fell to reach new lows below the key psychological level of 1.2000 before rebounding strongly after the British Parliament voted to begin a process of halting Britain’s departure from the European Union. The price is now trading above 1.2100.
Today will be another crucial day in the British Parliament, as a further vote will be held in an attempt to force a legal halt to the Brexit process. However, the British government will counter this by threatening to call a general election if such a vote is passed. There is also the chance that a vote to halt Brexit could be filibustered out.
Political developments in the British Parliament are going to be the key driver for the Pound in general today, and for this currency pair in particular.
I forecast that the British government will be forced to go for a general election today, which will probably cause volatility in the Pound but without firm directional movement.
If somehow the government wins today’s vote and is able to proceed towards Brexit, expect the price to fall back to the area below 1.2000 quickly.
Concerning the GBP, there will be an Inflation Report Hearing at 2:15pm London time. There will be important Parliamentary votes after that. There is nothing of high importance due today regarding the USD.