GBPUSD: Stuck between buyers and sellers
Yesterday’s signals were not triggered, as there was no bullish price action when the price first reached 1.3072.
Today’s GBP/USD Signals
Risk 0.75% per trade.
Trades may only be taken between 8am and 5pm 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 1.3153, 1.3191, or 1.3200.
- 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
- Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of 1.2948.
- 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 it looked obvious that the next decisive price movement here would be determined by whether this support level at 1.3074 held or broke down.
I thought that a short trade following a decisive breakdown of 1.3074 could be an interesting opportunity, but sellers would need to beware new buying kicking in as the price then would approach the big round number at 1.3000.
The former support level at 1.3074 has been invalidated and there are no nearby support levels.
The price action generally looks somewhat bearish, suggesting we will see lower prices over the short term.
The chart is still quite messy however, so I do not have much faith in the ability of technical analysis to predict price movement here, or in the Forex market generally. This is typical for late August when Forex markets typically drift aimlessly before getting more direction in September.
The line of least resistance looks, marginally, to be downwards, but as we get closer to 1.3000 there is more and more likelihood of buyers stepping in.
If you are determined to trade this currency pair today, a closely monitored long trade from a short timeframe bullish reversal as close as possible to 1.3000 will probably be the best opportunity which might set up.
There is nothing of high importance due today regarding either the GBP or the USD.