GBP/USD: Strong pivotal point likely at 1.2456
Last Thursday’s signals were not triggered.
Today’s GBP/USD Signals
Risk 0.75% per trade.
Trades must be entered 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 1.2456 or the upper trend line of the price channel shown in the chart below which is currently sitting at about 1.2445.
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 Idea
Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of 1.2285.
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 last Thursday that a release which hit the Pound should have more potential to push the price down than a bullish release would push it up, due to the medium-term bearish trend here.
This was a good call as the Bank of England’s release that day was dovish and did push the price down.
The technical picture is definitely bearish over the medium-term, with the bearish symmetrical price channel holding the price shown in the chart below.
The short-term picture is bullish as we have seen the price rise quite strongly in recent hours. However, the price is now close to what looks to be a very pivotal point at 1.2456, which could hold as key resistance if it is reached.
Due to the medium-term bearish trend, I am ready to take a short trade following a bearish reversal at 1.2456 if we get it later.
There is nothing of high importance scheduled today regarding either the GBP or the USD.