GBP/USD: British Pound is the Strongest Major Currency Today
Yesterday’s signals were not triggered as neither of the key levels were reached during yesterday’s London session.
Today’s GBP/USD Signals
Risk 0.75% per trade.
Trades must be taken between 8am and 5pm London time today only.
Short Trade Ideas
- Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.2842.
- 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.
- Remove 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
- Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of 1.2750.
- 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.
- Remove 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 British Pound was relatively strong, so I was ready to take a bullish bias if we got a bounce at 1.2624 until the price hit 1.2750 again.
The level was not hit but I was correct to look to the long side and see the price reaching 1.2750.
The USD is now selling off again everywhere, and it is not surprising that with Pound strength, we have seen the price close at another 50-day high and keep advancing.
The price has gotten established above the key psychological support level at 1.2750 and if it remains above that price, it will suggest a further rise is due soon.
Technical analysis has limited scope today because of the FOMC releases due later which can produce large volatility spikes and sharp, unexpected price movements regardless of the technical picture.
I would take a long trade from a bounce at 1.2750 but only if this happens during the first half of today’s London session, as it may not be wise leaving a trade open into the FOMC release.
There is nothing of high importance due today concerning the GBP. Regarding the USD, there will be a release of CPI (inflation) data at 1:30pm London time, followed by the FOMC Projections, Federal Funds Rate, and Statement at 7pm, followed by the usual press conference half an hour later.