GBP/USD: British Pound seen stronger
Yesterday’s signals were not triggered, as there was no bearish price action when the resistance level at 1.2850 was first reached.
Today’s GBP/USD Signals
Risk 0.75% per trade.
Trades may only be taken between 8 am and 5 pm London time today.
Short Trade Ideas
- Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.2977.
- Place the stop loss 1 pip above the local swing high.
- Adjust 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 ride.
Long Trade Ideas
- Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of 1.2848, 1.2804, or 1.2773.
- Place the stop loss 1 pip below the local swing low.
- Adjust 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 ride.
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 we were to see another attempt at 1.2850 and quite possibly a break above it. However, I also said that I would avoid trading this pair today.
I was correct about the price making a weak break above 1.2850, although the break was a little stronger than I had really expected, getting as high as the next round number at 1.2900.
What is interesting here is that although we have seen a very volatile climax in favor of the USD in precious metals, we are not seeing such a big climax in the major USD currency pairs, so it seems quite possible that prices will continue advancing over the coming days.
The British Pound was looking weaker than the Euro yesterday, as it has been for some time – but now it is holding up just as well as the Euro, with the support at 1.2848 surviving being tested during the early part of today’s London session.
This is a bullish sign, we have residual bullish momentum, and the price has already made a new 4-month high – so I am prepared to take a bullish bias here today if we get an hourly close above the recent swing high at 1.2904.
There is nothing of high importance scheduled today concerning either the GBP or the USD.