Last Thursday’s signals were not triggered, as the bearish price action at the resistance level identified at 1.2779 was not strong enough to trigger a short trade entry signal.
Today’s GBP/USD Signals
Risk 0.75% per trade.
Trades may only be entered before 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 1.2911 or 1.3023.
- 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 1.2785 or 1.2650.
- 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 that we may be getting firm support here below 1.2700. I thought that the support at 1.2650 looked likely to be very strong. This was an OK call as we saw the area at 1.2700 continue to hold and produce an upwards movement which has been technically stronger than the comparable move we have seen in EUR/USD, suggesting that the Pound may still be at least a little stronger than the Euro.
We have seen a long-term bearish trend in this currency pair, but we are now seeing a bullish retracement. The next question is whether the price will be able to continue to rise and get established above 1.2911 although I think the really crucial level is going to be the resistance at 1.3023.
Of all the major currency pairs, volatility is relatively high here, so day traders may want to focus on this currency pair today, trading reversals near key levels.
There is nothing of high importance due today regarding either the GBP or the USD.