GBPUSD: Looking a little more bearish
Yesterday’s signals were not triggered, as there was no bullish price action at 1.3015.
Today’s GBP/USD Signals
Risk 0.75% per trade.
Trades may only be entered between 8am and 5pm London time.
Short Trade Idea
Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.3090.
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 yesterday that the price looked uncertain, with bulls and bears fighting it out and it was quite likely that the U.K. inflation data would determine who wins. I saw two consecutive hourly closes above 1.3060 as a bullish sign that a further rise would be more likely to happen, so I wanted to take a weakly bullish bias if that happened.
This was a fairly good call as the price has still not even touched 1.3060 so it was enough to keep out of trouble. The price fell back but then rose but rose in a very weak way which gives me no confidence in the bulls. Despite the recent pattern of higher lows, it looks as if the price is going to break down again soon. We have no support until 1.2870 so the price has a lot of room to fall. However, it could be that the area just below the big round number at 1.3000 does attract long-term buyers.
There is no real long-term trend here to rely upon.
I think bears would be wise to wait for the price to break below 1.2950 and bulls would wise to wait for the price to get established above 1.3090. In the meantime, price movement looks hard to predict within that range from 1.2950 to 1.3090.
There is nothing of high importance due today regarding the GBP. Concerning the USD, Concerning the USD, there will be a release of Retail Sales data at 1:30pm London time.