GBP/USD: Support at 1.2500 is strong and significant
Last Thursday’s signals gave an excellent, profitable, fast long trade from the support level identified at 1.2520.
Today’s GBP/USD Signals
Risk 0.75% per trade.
Trades must be taken before 5 pm London time today only.
Short Trade Ideas
- Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.2575, 1.2650, or 1.2670.
- 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
- Long entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of 1.2509 or 1.2437.
- 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 we were continuing to see medium-term ranging conditions between 1.2500 and 1.2670, so it could be possible that the next good opportunity would again be a long trade entry from a bullish reversal at the support of 1.2520.
This was a great call.
We see the bulls holding up from the 1.2500 area while the price coils up below the nearest resistance level at 1.2575. This looks like today’s key pivotal point and it also looks likely to be broken, so I think we will see an up day today with a close above 1.2575.
However, we are unlikely to see a retracement to the nearest support level at 1.2509, so long traders will probably need to be fast and try to enter quickly on a bullish breakout above 1.2575 and be ready to exit quickly on shorter time frames. This is likely to be too challenging for all but the most experienced traders.
There is nothing of high importance scheduled today concerning either the GBP or the USD.