GBP/USD: Consolidation between 1.2950 and 1.3000 likely
Yesterday’s signals were not triggered, as none of the key levels were reached during yesterday’s London session.
Today’s GBP/USD Signals
Risk 0.75% per trade.
Trades must be entered prior to 5pm London time today only.
Short Trade Ideas
Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.3009 or 1.3046.
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.
Remove 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 Ideas
Long entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of 1.2942 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.
Remove 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 on balance, I thought that the price was more likely to rise over the coming hours than to fall. If the price hit the 1.3000 area later and makes a bearish reversal there, I thought this might provide a good short trade opportunity.
This was a pretty good call as the price did rise over the day as I predicted, topping out for the day just a few pips below the big round number at 1.3000 which I mentioned.
The Pound remains stronger than the Euro, and the fresh higher support level at 1.2942 is holding.
I think that today we are likely to either see a consolidation around the middle of the range between 1.2942 and 1.3000, or a weakly bullish movement.
Much of today’s movement may depend upon the reaction to the U.S. inflation data due for release later.
Regarding the GBP, there is nothing of high importance due today. Concerning the USD, there will be a release of CPI (inflation) data at 1:30pm London time.