EUR/USD: Price reaching new 1-month lows
Yesterday’s signals were not triggered as there was no bearish price action at 1.2300 or bullish price action at 1.2252.
Today’s GBP/USD Signals
Risk 0.75% per trade.
Trades may only be taken 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 1.2245 or 1.2371.
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 Idea
Long entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of 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 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 I was prepared to take a short trade from a bearish reversal at 1.2300, as risk-off sentiment was growing in the market and this was likely to continue pushing the price down. I did not want to rely upon support at 1.2252.
This was a great call as the price has moved down quite strongly here over the past day, getting established below 1.2252 which failed to hold as I anticipated. Unfortunately, the bearish turn took place above 1.2300 but below the next highest resistance level so the signal did not give a precise entry here.
The British Pound is one of the weakest currencies right now. It is weakening against the strong USD and even more so against the even stronger Japanese Yen. The price is making a new 1-month low and is in a firm downwards trend over the medium term.
I again take a bearish bias today as long as the price remains below 1.2250. I do not think the support level at 1.2139 is likely to be strong, but it may be an area for profit taking which prevents much of a fall any lower than that price.
Concerning the GBP, the Governor of the Bank of England will be giving a minor speech at 11:30am London time. There is nothing of high importance due today regarding the USD.