GBPUSD: Bullish double bottom near 1.3041?
Yesterday’s signals were not triggered, as there was insufficiently bullish price action at 1.3081.
Today’s GBP/USD Signals
Risk 0.75% per trade.
Trades may only be taken before 5pm London time today.
Long Trade Ideas
Long entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of 1.3041 or 1.2972.
Place 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 Ideas
Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.3136, 1.3175, or 1.3235.
Place 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 there were signs that the price was holding up now from the support at 1.3081. There may be scope for a brave long trade here if that level continued to hold up, but British inflation data could push the price anywhere.
This call wasn’t great, but the price is finding support between 1.3041 and 1.3081 which suggests there is some accuracy in seeking a long trade here, and the price is moving up over the short term. British inflation did come in higher than expected, but that failed to boost the price in any meaningful way.
It is again difficult to make any prediction right now on this currency pair as the Bank of England is making its monthly policy input today which could push the price anywhere.
I think the edge is on the long side now, as the price has given up all its gains and come back to the original area of the bullish move – there seems to be some demand left in this price area above the psychologically important 1.3000 area. However, it is very hard to say how far the price will be able to rise as we have a lot of resistance levels nearby.
Concerning the GBP, there will be a release of Retail Sales data at 9:30am London time. At Noon, the Bank of England will release its Monetary Policy Summary, Official Bank Rate, and Rate Votes. There is nothing of high importance due today regarding the USD.