GBP/USD: Yet bulls can be stopped easily below 1.3180
Yesterday’s signals were not triggered, as unfortunately the price never quite reached the support level at 1.3072, and the bearish price action at the resistance level of 1.3134 did not print until well after the London session ended.
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 1.3286 or 1.3305.
- 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
- Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of 1.3134 or 1.3072.
- 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 resistance level at 1.3134 was bottling up the price consolidating below it. This suggested that a bullish breakout above 1.3134 would lead to a bullish movement of some strength. I wanted to take a bullish bias following get two consecutive hourly closes above 1.3134 by 10 am New York time.
We did not get these closes above 1.3134 until well after 10 am New York time, but I was thinking in the right direction as we are seeing the price rise higher once the price started getting established above 1.3134, but not by a lot yet.
The outlook is bullish over the short-term here, backed by the general bearish trend in the U.S. Dollar. However, bulls should beware of the recent infection area at about 1.3180 which could halt a stronger advance. Zooming out, we can see in the price chart below that this pair is in a medium-term consolidation pattern capped at the 1.3180 area.
We also see the Euro stronger than the British Pound, which puts a small brake on the bullish short-term outlook.
I will stand aside from trading this pair today, but I think over the coming one or two days, the price is quite likely to advance to 1.3175.
There is nothing of high importance due today regarding either the GBP or the USD.