GBPUSD: 1.2870 looks like today’s pivotal point
Yesterday’s signals were not triggered, as there was no bullish price action at 1.2833.
Today’s GBP/USD Signals
Risk 0.75% per trade.
Trades may only be entered before 5pm London time today.
Long Trade Ideas
⦁ Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of 1.2822, 1.2800, or 1.2767.
⦁ 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 Ideas
⦁ Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.2870 or 1.2924.
⦁ 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 was looking for a long trade from a pivotal bullish bounce at 1.2833. However, this did not set up, with the low being made almost 20 pips below that price.
The price has stabilized after the recent boost to the Conservatives’ chance of winning next month’s general election outright – the increased certainty over Brexit which results boosted the Pound a little. This remains and the price is looking like it is making a bullish base.
However, we have a confluence of a resistance level at 1.2870 which is confluent with a short-term but well-defined descending trend line. It looks as if bulls and bears are very likely to fight it out at this level today, so I see this as very likely to be a pivotal point which would produce the best trade of the day, either long (if the price breaks above it) or short (if the price fails). I think a bullish move is more likely, but we have key inflation data due today for both currencies, so the price may well make some unpredictable movement today.
Regarding the GBP, there will be a release of CPI (inflation) data at 9:30am London time. Concerning the USD, there will be a release of CPI (inflation) data at 1:30pm, followed by testimony by the Chair of the Federal Reserve before Congress at 4pm