GBPUSD: More bearish on Brexit uncertainty
Yesterday’s signals were not triggered, as none of the key levels were reached yet.
Today’s GBP/USD Signals
Risk 0.75% per trade.
Trades may only be taken between 8am and 5pm London time today.
Long Trade Idea
Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of 1.2767 or 1.2697.
Place 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 Idea
Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.3041.
Place 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 I would take a bullish bias today if we got a firm bullish bounce following a pull back to the round number at 1.2900. This was a good call as that level did mark the low of the day, and the price subsequently rose to the 1.3000 level when the British Parliament passed a law to begin the Brexit process. However, the British Parliament then rejected the only timetable which would have made Brexit possible by its current due date of 31st October, and the Pound fell fairly strongly to new lows on this uncertainty.
We now await the response of the European Union to the British Parliament’s request for yet another extension to the Brexit date. There are also possible avenues of procedural chicanery that the British government and its opponents may pursue in the British Parliament.
If a sensible path to Brexit at a delayed date is agreed today, we can expect the Pound to rise, but the 1.3000 area may be too resistant to break, and we are not close to either clear-cut support or resistance. I take no directional bias on this pair today, although I note there is some fresh strength in the U.S. Dollar across the board.
There is nothing of high importance due today concerning either the GBP or the USD.