GBPUSD: Bullish above 1.3150
Last Thursday’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 Idea
Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of 1.3081.
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 1.3249.
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 the price had made a very strong long-term bullish breakout here, easily cutting through all the key resistance levels which were reached. There was no obvious resistance before 1.3250, so the price could easily rise by 100 pips or more over the day. I took a bullish bias. This was an OK call as the price rose over the day, but only by about 20 pips or so, so the move wasn’t as strong as it might have been.
We saw a bearish retracement on Friday as the U.S. Dollar got a boost from NFP data. However, the price has risen again already to reach new highs, so the outlook seems bullish again. There are hints that 1.3150 may be acting as a pivotal point – support when the price is above it, so it makes sense to be more bullish here when the price is above that level and rising. If the price closes above 1.3155 today that would be a further bullish sign. The Pound is strong as polls show the Conservative party is heading for a strong victory in the British general election on Thursday. Unless there are shock polls, the price is likely to continue to rise towards 1.3200 or even higher this week, so I take a bullish bias on this pair.
There is nothing of high importance due today concerning either the GBP or the USD.