Last Thursday’s signals produced a nicely profitable long trade from the bullish bounce at 1.3199.
Today’s GBP/USD Signals
Risk 0.75% per trade.
Trades must be entered between 8am and 5pm London time today only.
Short Trade Ideas
Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.3370, 1.3402, or 1.3434.
Put the stop loss 1 pip above the recent 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 1.3312 or 1.3241.
Put the stop loss 1 pip below the recent 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 despite the bearish technical picture following the double top near bearish case, we did see what looks like strong support extremely confluent with the round number at 1.3200. I was keen to enter a long trade from a bullish bounce there, and that was a great call as we did get that set up and it produced a nicely profitable trade which is still going strong today.
The technical picture is now very bullish. We had a new 50-day high close last Friday which is a bullish sign indicating that the price would be likely to rise higher still today, breaking out well above the former bearish double top near 1.3320. The price has risen strongly over the first hour of the London session, and is now very close to the nearest resistance level at 1.3370.
I am not keen to take a short trade although there are several levels of resistance nearby. Instead, I prefer to take a long trade following a pullback to support.
It is possible we will see a selloff later when the Governor of the Bank of England is testifying if he says anything seen as negative for the pound.
Regarding the GBP, the Governor of the Bank of England will be testifying before Parliament at 3:30pm London time on monetary policy. There is nothing of high importance scheduled today concerning the USD.