GBPUSD: Consolidating on Brexit uncertainty
Last Thursday’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 or 1.3081.
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 last Thursday that the best strategy here may be fading a spike to a key level at an extreme following the ECB release, but this would probably work better in EUR/USD. In any case, the ECB release had relatively little impact, so no extremes were reached anyway.
The price is consolidating after pulling back from its highs last week as the British Parliament again refused to take responsibility for Brexit, kicking the can down the road yet again and forcing another extension request to the EU in an attempt to delay or even stop Brexit.
The EU has agreed an extension but has not yet given a date. The British Parliament will probably vote today on whether to dissolve for an election which the government is currently expected to win, which would increase the chances of Brexit happening soon.
Therefore, the price is likely to be quiet today and the support level at 1.2767 should hold until the British parliament does something. There could be a long trade opportunity at that level or a fade from a spike to 1.3041 is something very dramatic happens, but these scenarios look unlikely to play out today.
There is nothing of high importance scheduled yet today concerning either the GBP or the USD.