GBPUSD: Long-term bullish breakout above 1.3000
Yesterday’s signals were not triggered, as there was no bullish price action at 1.3041 or 1.3081 when those levels were reached.
Today’s GBP/USD Signals
Risk 0.75% per trade.
Trades may only be entered before 5pm London time today.
Long Trade Idea
Long entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of 1.3081.
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 Idea
Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.3249.
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 the price was in a pivotal area (at the upper end of its recent multi-week range between 1.2750 and 1.3000), apparently beginning a downwards move, so there should be a trading opportunity here. If the price had 2 consecutive hourly closes below 1.2972 then I wanted to take a bearish bias on this currency pair.
This was enough to stay out of trouble, but I have been very wrong about this range holding ahead of the British election which will take place on Thursday next week. For some reasons, probably mainly the U.S. Dollar weakness but perhaps also the continuing strong government lead in the British opinion polls, the price has made a very strong long-term bullish breakout here, easily cutting through all the key resistance levels which were reached. There is now no obvious resistance before 1.3250, so the price could easily rise by 100 pips or more today.
I take a bullish bias on this pair and day traders would be wise to look for long trades after bearish pullbacks begin to turn bullish on shorter time frames.
There is nothing of high importance due today concerning either the GBP or the USD.