GBP/USD: Picture would be much more bullish above 1.2550
Yesterday’s signals were not triggered as the bullish price action took place a few pips below the support level which was identified at 1.2488.
Today’s GBP/USD Signals
Risk 0.75% per trade.
Trades must be entered prior to 5 pm 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 1.2613.
- 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 1.2437 or 1.2406.
- 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 the technical picture was bullish, but the advance was slow. Bulls really needed to clear 1.2550 to get the price moving, so I would only take a bullish bias if we had gotten two consecutive hourly closes above that level.
This was a good call insofar as I was correct the price needed to advance, as we are now seeing a bearish retracement and a failure to hold even above the big round number at 1.2500. Riskier currencies such as the Pound have been on a good run over recent days and it is starting to look as if the U.S. Dollar is going to make a small comeback today, which should produce some kind of bearish retracement here.
Today’s most likely pivotal point clearly looks like being 1.2437, so I will still take a long trade if we get a bullish bounce from that support level later. If the price can make two consecutive hourly closes below 1.2437, that would be a bearish sign.
The importance of 1.2437 is reinforced by the fact that there are no major news releases scheduled today, so technical factors are likely to be a major driver of the price after sentiment.
.jpg "GBPUSD")
There is nothing of high importance scheduled today regarding either the GBP or the USD.