GBP/USD: Support at 1.2252 looks strong
Yesterday’s signals were not triggered, as neither of the key levels were reached.
Today’s GBP/USD Signals
Risk 0.75% per trade.
Trades must be taken prior to 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 1.2388 or 1.2420.
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 25 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 1.2252.
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 25 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 would be prepared to take another short trade at 1.2420 if the price got back to that level and then made a bearish turn. Although the price has continued to move upwards and I would now place the nearest resistance level even lower than that, at 1.2388, the action is still ranging so I think the bulls and bears are evenly matched now.
I see the best chance to succeed in making some profit from this currency pair today as taking quick trades on short time frames from bounces off either support or resistance levels.
If the price can get established today above 1.2420, it would be a bullish sign, but I do not think this is a very likely scenario.
Concerning the GBP, there will be a release of Flash Services & Manufacturing PMI at 9:30am London time. Regarding the USD, there will be a release of Unemployment Claims at 1:30pm followed by Flash Manufacturing PMI at 2:45pm.