GBP/USD: Pound is relatively strong
Yesterday’s signals were not triggered as none of the key levels were reached.
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
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.
Put 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.
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 1.2301 or 1.2139.
Put 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.
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 yesterday that although the outlook was bullish, but with no major news scheduled and resistance near 1.2500 which was likely to be strong, we would probably see the price consolidate for a while between 1.2311 and 1.2500. This was a great call as the price did stay below 1.2500 and has held up above 1.2300 if not exactly 1.2311 which has been invalidated as a precise support level.
The USD has come back slightly but the major Forex market theme is lowering volatility and calmer, more normalizing markets.
With a slightly stronger USD it is notable that the British Pound is relatively firm, definitely firmer than the Euro. This leads me to look for a long trade from a more decisive bullish bounce off 1.2300 if we get it during today’s London session, expecting another move u towards the 1.2500 area. I will take a bullish bias today if we get this setup.
There is nothing of high importance scheduled for today concerning either the GBP. Regarding the USD, there will be a release of CB Consumer Confidence data at 3pm London time.