Yesterday’s signals were not triggered, as there was no bearish price action at either resistance level which was reached.
Today’s GBP/USD Signals
Risk 0.75% per trade.
Trades must be taken before 5pm London time today.
Short Trade Ideas
Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.3011 or 1.3115.
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 1.2940 or 1.2785.
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 if price broke above the bearish trend line, there were a couple of resistance levels nearby, so any upside is likely to be limited.
This was a wrong call, as the price actually rose by quite a lot after breaking above that trend line which is still shown within the price chart below.
The price got all the way up to the very key resistance level at 1.3115 before reversing very strongly and falling a long way before recovering.
The market right now is volatile as the U.S. presidential election seems too close to call, with both sides likely to claim victory while the true result may remain murky for several days. This will be a tense and volatile environment for the market.
It is worth noting that the U.S. Dollar is generally strong and often acts as a safe haven in times of uncertainty.
Overall, the best approach here is likely to be trading reversals from price extremes. Therefore, I will take a short trade from a bearish reversal at 1.3115 or a long trade from a bullish reversal at 1.2785.
There is nothing of high importance due today concerning the GBP. Regarding the USD, counting and result releases are underway in the U.S. presidential election, and there will be a release of the ADP Non-Farm Employment Change at 1:15pm London time followed by ISM Services PMI data at 3pm.