GBP/USD: U.K. Advance GDP data had little impact
Yesterday’s signals were not triggered, as there was no bearish price action when the resistance level identified at 1.2957 was reached.
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 1.3009 or 1.3046.
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 1.2942 or 1.2870.
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 yesterday that as the price was consolidating and the market was awaiting British Advance GDP data, trading reversals at either of the nearest key resistance and support levels were equally likely to be good trades.
This was enough to stay out of trouble and wasn’t a bad call as although the price has broken up above the upper band of that consolidation range at 1.2957, it has done so very weakly.
However, there is a clear new higher support level at 1.2942, so the technical picture is now slightly more bullish.
It is notable that the Pound is now behaving more strongly than the Euro, which is in a long-term bearish trend.
On balance, I think the price is more likely to rise over the coming hours than to fall. If the price hits the 1.3000 area later and makes a bearish reversal there, this might provide a good short trade opportunity.
Regarding the GBP, there is nothing of high importance due today. Concerning the USD, the Chair of the Federal Reserve will be testifying before Congress at 3pm London time.