GBPUSD: Finally bottoming above 1.2972?
Last Thursday’s signals were not triggered, as there was no bullish price action when the support level identified at 1.3041 was first reached.
Today’s GBP/USD Signals
Risk 0.75% per trade.
Trades must be entered 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, 1.2920, or 1.2870.
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 1.2080 or 1.3136.
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 it was 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 thought that the edge was on the long side now. I was wrong, the price broke below the support and moved to trade below the 1.3000 area.
There are signs now that the price may finally be bottoming out at or above 1.2972, but it does not seem ready to rise yet. There has been high volatility which means we could still see some movement even just before the Christmas holiday, so this of all the major currency pairs is probably going to be most interesting to day traders.
A short from a rejection of 1.3080 or a long at a bullish bounce at 1.2972, monitored on short time frames, will probably be the best strategy to adopt in trading this currency pair today.
There is nothing of high importance due today regarding either the GBP or the USD.