GBP/USD: Likely to consolidate today between 1.2396 and 1.2484
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 before 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 1.2484 or 1.2571.
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 25 pips in profit and leave the remainder of the position to run.
Long Trade Ideas
Long entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of 1.2396 or 1.2378.
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 25 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 the deterioration in risk sentiment had created a more bearish technical picture, with the price well back within a recent zone of comfort between 1.2396 and 1.2484. I thought that these levels would hold yesterday, and I was correct.
The price is currently moving down after having almost reached the resistance level at 1.2484 which suggests that we will see a further gentle move down over today. However, the support at 1.2396 looks structurally very strong, so I would be prepared to take a long trade there later if we get a bullish bounce. If before then we get a strong bearish reversal following a failed test of the resistance level at 1.2484, I would also be prepared to take a short trade from there.
I think that for another day, the range from 1.2396 to 1.2484 will hold.
Concerning the USD, there will be a release of ISM Non-Manufacturing PMI data at 3pm London time. Regarding the GBP, there is nothing of high importance due today.