GBP/USD: Pound Remains Weak
Yesterday’s signals were not triggered, as none of the key levels were reached yet.
Today’s GBP/USD Signals
Risk 0.75% per trade.
Trades may only be entered before 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 1.2859 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 yesterday that I thought we were going to see a down day today, and I would still be ready to take a short trade if the resistance level at 1.2859 was reached and rejected.
I was wrong about yesterday’s move from open to close, but correct to be generally bearish, as the price action is quite clearly bearish, and the price has been unable to even touch the very pivotal resistance level at 1.2859. However, bulls are buying at about 1.2750, so there seems to be a floor.
Overall, the British Pound is generally weak on concerns over the future terms of U.K. / E.U. trade, so as long as 1.2859 continues to hold as resistance, I keep a generally bearish bias and again look for a short trade from a bearish reversal at or very close to that level which might set up later on.
There is nothing of high importance due today regarding the GBP. Concerning the USD, there will be a release of the ADP Non-Farm Employment Change at 1:15pm London time followed by ISM Non-Manufacturing PMI data at 3pm.