GBP/USD: Pound weakens on E.U. trade deal fears
Yesterday’s signals were not triggered, as there was no bullish price action when any of the key support levels were reached.
Today’s GBP/USD Signals
Risk 0.75% per trade.
Trades may only be entered before 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 1.3079.
- 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 1.2900, 1.2848, or 1.2804.
- 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 weakness in the British Pound driven by the lack of progress towards a final U.K. / E.U. trade deal was likely to continue yesterday.
This was a great call as the price fell relatively strongly yesterday, with the Pound remaining one of the weakest currencies. I was also correct about 1.3180 being pivotal.
Another factor of bearish significance lies in the fact that the price broke back below the psychologically important round number at 1.3000 with ease and has remained below that level.
The late Asian session saw a small recovery of risky assets against the Dollar, but that has been barely felt here, which is another bearish sign.
There are several support levels below which might stop the downwards movement, but there is really no technical indication that any of them are likely or especially likely to be strong.
Overall, I see short trades as the best opportunities which might set up today.
There is nothing of high importance due today regarding either the GBP or the USD.