Yesterday’s signals were not triggered, as there was no suitable price action at either of the key levels which were reached.
Today’s GBP/USD Signals
Risk 0.75% per trade.
Trades may only be entered before 5pm 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 1.3115 or 1.3180.
Put the stop loss 1 pip above the recent swing high.
Adjust the stop loss to break even once the trade is 25 pips in profit.
Take off 50% of the position as profit when the price reaches 25 pips in profit and leave the remainder of the position to ride.
Long Trade Idea
Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of 1.2785.
Put the stop loss 1 pip below the recent swing low.
Adjust the stop loss to break even once the trade is 25 pips in profit.
Take off 50% of the position as profit when the price reaches 25 pips in profit and leave the remainder of the position to ride.
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 market was volatile as the U.S. presidential election seemed too close to call, with both sides likely to claim victory while the true result may remain murky for several days. This would be a tense and volatile environment for the market, so I thought that the best approach here was likely to be trading reversals from price extremes.
None of the extreme levels were reached, but this call was enough to keep out of trouble, and I was right about the price action being a volatile range as this is what we got.
I think this situation will persist, although it is looking very likely that somehow Biden will secure a very narrow victory in the U.S. presidential election, but for another day we can expect volatility in the U.S. Dollar, and we also have volatility in the Pound due to the end of the year approaching with a trade deal on Brexit still not finalized between the U.K. and the E.U. so rumours and political developments on that are still likely to push the Pound around.
I see trading any bearish reversal at 1.3180 or a bullish reversal at 1.2785 (very unlikely to happen) as the best approach today. The picture may well become more stable tomorrow.
We got the monthly input from the Bank of England a few hours ago, but this gave no surprises or meaningful changes to perceptions, and hardly moved the price at all.
There is nothing of high importance due today concerning the GBP. Regarding the USD, counting and result releases are continuing in the U.S. presidential election, and the FOMC Statement will be released at 7pm London time followed by the usual press conference half an hour later.