GBPUSD: A little more bullish on Brexit extension
Yesterday’s signals were not triggered, as none of the key price levels were ever reached.
Today’s GBP/USD Signals
Risk 0.75% per trade.
Trades must be entered before 5pm London time today.
Long Trade Idea
Long entry following a bullish price action reversal on the H1 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 Idea
Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.2876.
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 yesterday that the price was likely to be quiet today and the support level at 1.2767 should hold until the British parliament did something. This was a good call as the level held.
All the British Parliament did yesterday was, unsurprisingly, vote for more delay to any possible resolution of the Brexit process. There is simply a majority in the British Parliament that wants to delay the process indefinitely but is too cowardly to admit it as the voters instructed the government directly to leave the EU in 2016, and they are also working to prevent an election happening before 2022.
The EU agreed the Brexit extension and the U.K. may now remain a member until 31st January 2020. The British government is trying now to get Parliament to vote for an election which should produce a more pro-Brexit Parliament. It is not clear that they will succeed.
The Pound has been very slightly boosted by this greater certainty. It is unclear how the Pound will react if Parliament does finally vote for an election. I expect this pair to range in the near future as that debate goes on.
Technically, today’s pivotal point looks like 1.2876, so if the price can get established above that level relatively early during the London session, I would take a cautiously weak bullish bias above that level.
There is nothing of high importance due today concerning the GBP. Regarding the USD, there will be a release of CB Consumer Confidence data at 2pm London time.