GBPUSD: Very bullish and ready to test 1.3000
Last Thursday’s signals gave a quick but profitable short trade following the bearish rejection of the resistance level identified at 1.2970.
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 1H1 time frame H1H1H1 time frame immediately upon the next touch of 1.2767.
Put 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 1.3041 or 1.3081.
Put 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 due to recent progress towards a Brexit deal, the price was highly likely to remain very volatile and to rise or fall dramatically over the day. This was an accurate call as the price has continued to rise quite strongly and is now breaking up to new multi-month highs, even breaching the psychological level at 1.3000 for short periods.
We are now seeing a procedural battle in the British Parliament between the government and its opponents, with the latter determined to politically humiliate the government by forcing another delay to Brexit beyond the 31st October deadline. In either case, prospects look brighter for a softer Brexit or perhaps no Brexit at all, both of which are boosting the Pound. As the U.S. Dollar is also weak, we have a very bullish situation in this currency pair and also likely high volatility, and this makes this pair an exciting prospect for traders to focus on.
I would take a bullish bias today if we get a firm bullish bounce following a pull back to the round number at 1.2900.
There is nothing of high importance due today concerning either the GBP or the USD.