GBPUSD: Weakly bullish within 1.2750 – 1.3000 range
Last Thursday’s signals were not triggered as there was insufficiently bullish price action when the support levels were reached that day.
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 1.2903, 1.2870, or 1.2822.
⦁ 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 Idea
⦁ Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.3041.
⦁ 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 last Thursday that despite the more bullish picture, and the clearing out of all resistance levels below 1.3041, I thought that the range we were seeing between about 1.2750 and 1.3000 would continue to hold. I was ready to take a short bias today if the price can make a bearish reversal at or very close to 1.3000. This was a relatively good call as the high of the day was made early, just below 1.2950, and the major move over the day was downwards, so the upper end of the price range made itself felt.
The price is continuing to consolidate. There is resistance at 1.2923 which may hold although I have not included it as resistance in my list above as it is too early to use this level. I think we are quite likely to see a move down now as we are at the upper side of the range and also because British opinion polls are beginning to tighten, suggesting an inconclusive election outcome is more likely, and that would be negative for the Pound. I would be prepared to take a bearish bias if we get a bearish reversal at or above 1.2950.
There is nothing of high importance due today concerning the GBP. Regarding the USD, there will be a release of ISM Manufacturing PMI data at 3pm London time.