GBPUSD: Selling around 1.2950 area
Yesterday’s signals were not triggered, as there was no bullish price action when the price reached the support level identified at 1.2943.
Today’s GBP/USD Signals
Risk 0.75% per trade.
Trades may only be taken 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 1.2897 or 1.2867.
⦁ Put 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 1.2931 or 1.2943.
⦁ Put 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 although bullish the price was coming to a very key and long-term zone of resistance which starts close to the very big psychological round number at 1.3000. This meant we may see another failure of the bulls here, or a very technically significant long-term bullish breakout when we can start to get New York closes above approximately 1.3000.
I took a bullish bias on this pair between 1.2943 and 1.2990. This produced a loss but a fast and tight one and was a good call in identifying the day’s pivotal point, which was 1.2943 as once the price got established below that level, the action remained bearish for the rest of the day.
It is significant the price was unable to stay bullish as it got close to the area of long-term resistance based around 1.3000. We are also seeing selling from the half-number at 1.2950. The Pound should remain quite strong as long as polls continue to show a clear Conservative victory in the 12 December election is expected, but some downwards movement here seems logical next.
I see 1.2897 as likely to be today’s pivotal point. I would take a weakly bearish bias if the price gets established below that level.
There is nothing of high importance due today concerning the GBP. Regarding the USD, there will be a release of FOMC Meeting Minutes at 7pm London time.