GBPUSD: Bulls threatening breakout above 1.2750 – 1.3000 range
Yesterday’s signals were not triggered, as none of the key levels were reached.
Today’s GBP/USD Signals
Risk 0.75% per trade.
Trades must be taken between 8am and 5pm London time today only.
Long Trade Ideas
- Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of 1.2972 or 1.2920.
- 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 1.3041 or 1.3081.
- 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 the price was close to 1.2950 and was very much challenging the upper end of this range from 1.2750 to about 1.3000. I thought the resistance would hold until after the election on 12th December, therefore I was prepared to take a bearish bias here if we had gotten a firm bearish reversal at or above 1.2950.
This has worked out OK so far as yesterday’s Dollar weakness pushed the price up here to a new multi-month high closing price just below 1.3000. However, in this area, we have just gotten a bearish turn, and there could be 100 or 200 short pips of profit to come from a move down from the top of this range. On the other hand, if the price can get established later above 1.3010 at new highs, that would be a bullish sign.
The price is in a pivotal area, apparently beginning a downwards move, so there should be a trading opportunity here. If the price has 2 consecutive hourly closes below 1.2972 then I would take a bearish bias on this currency pair today.
There is nothing of high importance due today concerning the GBP. Regarding the USD, there will be a release of the ADP Non-Farm Employment Change forecast at 1:15pm London time, followed by ISM Non-Manufacturing PMI data at 3pm.