GBPUSD: Weakly bullish above 1.3060
Yesterday’s signals were not triggered, as there was no bearish price action when the price reached 1.3015.
Today’s GBP/USD Signals
Risk 0.75% per trade.
Trades must 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 1.3015 or 1.2870.
- 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 1.3090.
- 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 looked likely to fall further and the thing to watch out for was two consecutive hourly closes below the swing low at 1.2961 during the first half of the London session. This was a good call as the absence of those closes below 1.2961 signalled a failed bearish breakdown and a rise and price, so it was enough to keep anyone out of trouble.
We have a more interesting technical picture today – there is a medium-term bearish trend line which is holding the price down at about 1.3040, and also new support at 1.3015 which is backed by the big round number behind it at 1.3000.
This means bulls and bears are fighting it out and it is quite likely that the U.K. inflation data due soon will determine who wins.
We have no long-term trend to guide us, but I would see two consecutive hourly closes above 1.3060 as a bullish sign that a further rise was most likely to happen, so I would take a weakly bullish bias if that happens.
There is nothing of high importance due today regarding the USD. Concerning the GBP, there will be a release of CPI (inflation) data at 9:30am London time.