GBP/USD: Pound making bullish consolidation
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 technically I preferred a long trade from 1.2300 but I thought the USD was likely to strengthen later once New York opened so a short trade following a sustained break below 1.2300 was likely to be the most profitable set up to watch out for. I was right to look for a long trade at 1.2300 although it was never quite reached, as it has continued to hold up as support, but wrong about the level breaking down. I thought the U.S. stock market would react more strongly to it becoming increasingly obvious that the U.S. is becoming the epicentre of the coronavirus pandemic.
The technical situation has not changed, with the price continuing its bullish consolidation above the very pivotal support level at 1.2300. The Pound is one of the relatively stronger major currencies right now. I am still happy to take a long trade from a bounce at the support at 1.2301, but I do see still a strong possibility of a breakdown if stock markets begin to drop strongly later today once New York opens. So, watch what happens at 1.2300.
There is nothing of high importance scheduled for today concerning the GBP. Regarding the USD, there will be a release of Unemployment Claims data at 1:30pm London time.