GBP/USD: New long-term lows below 1.2957
Last Thursday’s signals were not triggered, as the price never reached 1.3009.
Today’s GBP/USD Signals
Risk 0.75% per trade.
Trades may only be taken before 5pm London time today.
Short Trade Ideas
Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.2957 or 1.3009.
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.
Take off 50% of the position as profit when the price reaches 20 pips in profit and leave the remainder of the position to run.
Long Trade Ideas
Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of 1.2870, 1.2822, 1.2799, or 1.2767.
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.
Take off 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 I would be prepared to take a short trade at bearish reversals at any resistance level, especially 1.3009. I would feel much more strongly bearish below 1.2950 if the price could get there.
This was a good call, although the price never quite reached 1.3009. It did manage however to get below 1.2950 that day and continue to fall from there.
The picture is bearish although the trend is shorter-term than it is in the EUR/USD currency pair. However, the USD is strong almost everywhere, and the Pound is weak as well as the Euro, perhaps weaker, as the British government signalled that they would be prepared to end the 2020 transition period without a trade deal with the E.U. after Brexit happened at the end of last month.
I would not be interested in taking any long trades today as there are no news items scheduled which could be likely to turn this trend around. I would take a short bias if the price can close below 1.2870 for two consecutive hours early in today’s London session.
There is nothing of high importance due today regarding either the GBP or the USD.