GBP/USD: Ranging from 1.2870 to 1.3000
Last Thursday’s signals were not triggered, as the bullish price action took place below 1.2870.
Today’s GBP/USD Signals
Risk 0.75% per trade.
Trades must be taken prior to 5pm London time today only.
Short Trade Ideas
Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.2980 or 1.3016.
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 1.2925 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 last Thursday that the support level I had identified at 1.2870 had been very clearly pivotal before and could be expected to provide some strong support. However, I was also ready to take a short bias if it broke down, and it did, so my call was wrong as it reversed bullishly right away – but fortunately, not by much over the rest of that day.
The U.S. Dollar is broadly strong, so it is interesting that we see it making not such strong progress against the GBP, which reveals a little strength in the GBP. Nevertheless, the picture is at least weakly bearish, with the bearish descending trend line shown in the price chart below keeping the price below the 1.3000 area. For this reason, I think the most interesting trade which might set up today would be a short trade from either of the two nearest resistance levels, as they are somewhat confluent with both this trend line and the big round number at 1.3000. So, I would take a bearish bias today if we get a bearish reversal at either 1.2980 or 1.3016.
There is nothing of high importance due today concerning either the GBP or the USD.