Last Tuesday’s GBP/USD signals were not triggered, as none of the key levels identified were reached that day.
Today’s GBP/USD Signals
Risk 0.75%.
Trades must be entered between 8am and 5pm London time today only.
Short Trade Ideas
Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.3724 or 1.3759.
Place the stop loss 1 pip above the local swing high.
Move the stop loss to break even once the trade is 20 pips in profit.
Remove 50% of the position as profit when the price reaches 20 pips in profit and leave the remainder of the position to ride.
Long Trade Ideas
Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of 1.3617, 1.3588, 1.3560, or 1.3527.
Place the stop loss 1 pip below the local swing low.
Move the stop loss to break even once the trade is 20 pips in profit.
Remove 50% of the position as profit when the price reaches 20 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 last Tuesday that the technical picture had become considerably more bearish. The price chart showed a medium-term bearish head and shoulders pattern, with a neckline at 1.3621 which was formerly support. As this was breaking down, I thought that we would see the price continue to fall over the day and I was most interested in a short trade from a bearish reversal at 1.3621.
I could not have been more wrong – after falling below 1.3621 and looking very bearish, the price immediately turned around and rose strongly to hit a new multi-year high price just some hours later.
After making a bearish reversal last night at the resistance level at 1.3759, which I had identified earlier in the week, the price went on to fall quite strongly.
The essential condition technically of this pair is of a slow but steady long-term bullish trend with deep dips. Therefore, I think this pair remains a buy from bounces at or close to support levels approximately 100 pips or so off the recent swing highs. So, it will make sense to take a long trade today from a bullish bounce at support levels starting at 1.3617.
There is nothing of high importance due today regarding the GBP. Concerning the USD, there will be a release of advance GDP data at 1:30pm London time.