GBP/USD: New lower resistance level at 1.2552
Yesterday’s signals were not triggered, as the bullish price action took place slightly below the support level identified at 1.2571.
Today’s GBP/USD Signals
Risk 0.75% per trade.
Trades may only be entered between 8am and 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 1.2552 or 1.2624.
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
Long entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of 1.2371.
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 price was a bit more likely to rise than fall over the day. I was looking for a long trade following a bullish bounce at 1.2571.
The price actually went sideways during the London session, before selling off later, so this call was enough to avoid trouble but was not very helpful otherwise.
We see the USD strengthening over recent hours everywhere, and especially against the British Pound, which is not showing the same level of strength that the Euro is showing.
Another bearish factor is the new lower resistance level at 1.2552.
The price chart below shows the ascending price channel which the price broke out of a few days ago, and the price is getting back to it – it is possible there could be a bullish bounce at either of these trend lines if and when they are reached.
A “wild card” today will be the European Central Bank’s monetary policy release, which could have an effect on the price here as a secondary effect from price movement it may cause in the Euro.
I see the likely price movement today as too difficult to predict with any confidence. The picture may be clearer by the end of today’s London session.
There is nothing of high importance due today concerning either the GBP or the USD.