GBP/USD: U.K. coronavirus strategy in focus
Last Thursday’s signals were not triggered, as there was no bullish price action when the price reached 1.2705 or 1.2617.
Today’s GBP/USD Signals
Risk 0.75% per trade.
Trades may only be entered prior to 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 1.2515, 1.2624, or 1.2704.
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 1.2250, 1.2139, 1.1905, or 1.1800.
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 last Thursday that I took a bearish bias as long as the price remained below 1.2842, to at least the support level at 1.2705. It looked as if the day would be a down day.
This was a great call, as the price fell strongly over the day, and then fell even more strongly the next day.
The global crisis is developing quickly and as central banks and governments scramble to act, the situation is very fluid. However, the British Pound, for whatever reason, is looking weak, and therefore there could be very profitable short trade opportunities here.
The price is finding some support at the big psychological quarter-number of 1.2250. I think that this level will be very pivotal today. If the price can get established below it, it is likely to start falling more strongly. As volatility is so high, we could easily see the price fall by 200 or so pips today and his 1.2000 or even lower.
I take a bearish bias on this pair today below 1.2250, but I would be nimble on short time frames and keep trade sizes small.
There is nothing of high importance scheduled today regarding either the GBP or the USD.