GBP/USD: U.K. coronavirus strategy reversal in focus
Yesterday’s signals were not triggered, as there was no bullish price action when the support level identified at 1.2139 was reached.
Today’s GBP/USD Signals
Risk 0.75% per trade.
Trades may be entered prior to 5pm London time today only.
Short Trade Idea
Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.2139
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 1.1905 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 yesterday that as the U.S. Dollar was broadly strong, I would be bearish on this currency pair today below 1.2250. This was a great call as the price has fallen by more than 250 pips from that level.
There is every reason to be bearish, as the Dollar remains strong and as the U.K. is now in focus as its Government says it expects a dramatic rise in coronavirus infections and makes a stronger push for social distancing measures.
The price has traded below 1.2000, which is a very big round number and key psychological level, but there are signs it may be finding some support there. Despite that, I am ready to follow the powerful bearish momentum if the price breaks to new lows later below 1.1985, so I will take a bearish bias today if we get an hourly close below that level, until at least 1.1905.
There is nothing of high importance scheduled today regarding either the GBP or the USD.