GBP/USD: More bearish below 1.2975
Yesterday’s signals were not triggered, as none of the key levels were reached.
Today’s GBP/USD Signals
Risk 0.75% per trade.
Trades may only be taken before 5pm London time today.
Short Trade Ideas
- Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.3033, 1.3037, or 1.3080.
- 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.
Long Trade Idea
- Long entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.2870.
- 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 I saw the best approach as either taking a long bias if the price could get established above those two resistance levels (up to 1.3037), or a bearish bias if it could get established below the ascending trend line.
This was a good call, as it was at least enough to keep out of trouble because the price stayed within the boundaries within which I took no directional bias.
The picture is more bearish now, with the price falling quite firmly to test the ascending trend line again. It looks quite likely that it will break down.
I would be prepared to take a bearish bias today if we get two consecutive hourly closes below that trend line at 1.2975. However, the Bank of England release could be a wild card so beware of that.
Regarding the GBP, the Bank of England will release its Monetary Policy Report, Summary, Votes, and Official Bank Rate at Noon London time. Concerning the USD, there will be a release of Advance GDP data at 1:30pm.