GBP/USD: Pound Remains Weak
Last Thursday’s signals produced a long trade from the doji bounce at 1.2870 which made little more than the minimum 25 pips of profit.
Today’s GBP/USD Signals
Risk 0.75% per trade.
Trades must be taken between 8am and 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 1.2859 or 1.2920.
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 Idea
Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of 1.2697.
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 if the price could break down below the consolidating triangle pattern and 1.2870, that would be a very bearish sign. This was a good call as that area of support did hold before finally breaking down dramatically on Friday, so it was pivotal.
We now have a much more bearish technical picture, with that pivotal area at about 1.2870 still standing out in the price chart, although I have adjusted the most probable exact location of the pivotal point to 1.2859. If this level holds as resistance, the price should make another strong downwards movement, so I would be happy to take a short trade from a bearish reversal here.
Risk sentiment seems to be improving somewhat after some central banks have begun signalling a willingness to intervene, but the British Pound is relatively weak anyway on fears of the likelihood of a trade deal between the U.K. and the E.U. which is due to be struck before the end of 2020 when the Brexit transition period ends.
There is nothing of high importance due today regarding the GBP. Concerning the USD, there will be a release of ISM Manufacturing PMI data at 3pm London time.