Last Thursday’s signals were not triggered, as the bearish turn at 1.3115 did not complete until after the London session had finished.
Today’s GBP/USD Signals
Risk 0.75% per trade.
Trades must be taken 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 1.3258, 1.3320, 1.3370.
Place 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 1.3079 or 1.3005.
Place 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 yesterday that although we could expect volatility in this currency pair over the course of the day, I saw trading any bearish reversal at 1.3180 or a bullish reversal at 1.2785 (very unlikely to happen) as the best approach.
Price action was in fact not volatile over Thursday, but the price never reached any key levels, so my call was enough at least to keep out of trouble.
We have seen the pound rise in line with risk generally over recent days as it becomes more and more likely that the U.S. election result has been settled, with the U.S. weakening – risk appetite has generally improved and this has pushed the price up to a new 2-month high.
The price is currently in the middle of a fairly wide technical range between the nearest support and resistance levels, so I think a reversal at either 1.3079 or 1.3258 could be a good trade today.
There is a long-term bullish trend, so trading long from a bullish bounce at 1.3079 is likely to be the best potential trade set up which might happen today.
Concerning the GBP, the Governor of the Bank of England will be speaking at a minor conference at 10:35am London time. There is nothing of high importance due regarding the USD.