GBP/USD: New 35-year low price last week
Last Thursday’s signals were not triggered as there was no bearish price action at 1.1656 during that day’s London session.
Today’s GBP/USD Signals
Risk 0.75% per trade.
Trades may only be entered between 8am and 5pm London time today.
Short Trade Ideas
Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.1710 or 1.1881.
Place 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.
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
Long entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of 1.1400.
Place 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.
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 thought the price may now find a bottom, at least for a while, but I remained bearish overall, if we had a bounce at resistance or if we saw an hourly close below yesterday’s low price. This was a good call as the price did find a bottom and there was no hourly close below the previous day’s low.
The price has recovered and stabilized somewhat, but volatility remains high. The U.K. seems poised to begin a sharp increase in coronavirus cases, especially in London, and with the Euro also very weak, and with Britain’s economy extremely reliant on international trade, the Pound may well break below last week’s 35 year low.
A short-term technical bearish sign can be seen in the price chart below, with the final leg of a bearish head and shoulders pattern seeming to form from the nearest resistance level at 1.1710. I think the price is likely to fall for some hours but is also still likely to find support over the short term at 1.1500 or maybe below 1.1500.
There is nothing of high importance scheduled today regarding either the GBP or the USD.