Yesterday’s signals were not triggered, as there was no bearish price action when the resistance level identified at 1.2911 was first 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 1.3023 or 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
- Long entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of 1.2898 or 1.2785.
- 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 despite the short-term bearishness, I saw the nearby support level at 1.2785 as likely to be very strong, but overall price direction as unclear.
The price made a bullish breakout above 1.2900, and the technical picture here is now more bullish than that of the EUR/USD.
If the price can remain above 1.2900, that will be a bullish development. Risk sentiment has been generally boosted by hints of some progress towards a political solution of a U.S. stimulus package. This has helped lift the Pound against the Dollar.
The price is likely to drift above 1.2900 until the New York open later today when there will be a key U.S. data release plus probably further rumors on U.S. stimulus, and these factors are likely to drive the price here today.
I will be equally happy to take a long trade from any bullish bounce at a key support level or a short trade from a bearish reversal at 1.3023.
There is nothing of high importance scheduled today concerning the GBP. Regarding the USD, there will be a release of ISM Manufacturing PMI data at 3 pm London time.