Last Thursday’s GBP/USD signals were not triggered, as there was no bearish price action when the resistance level at 1.3724 was first reached that day.
Today’s GBP/USD Signals
Risk 0.75%.
Trades may only 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 1.3759 or 1.3822 or 1.3879.
Put the stop loss 1 pip above the local swing high.
Adjust the stop loss to break even once the trade is 20 pips in profit.
Take off 50% of the position as profit when the price reaches 20 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 1.3617, 1.3588, 1.3560, or 1.3527.
Put the stop loss 1 pip below the local swing low.
Adjust the stop loss to break even once the trade is 20 pips in profit.
Take off 50% of the position as profit when the price reaches 20 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 the essential technical condition of this pair was of a slow but steady long-term bullish trend with deep dips. Therefore, I thought that this pair remained a buy from bounces at or close to support levels approximately 100 pips or so off the recent swing highs. So, I thought that it would make sense to take a long trade Thursday from a bullish bounce at support levels starting at 1.3617.
This was a good call as I was exactly right about buying from approximately 100-pip dips, although the price did not fall quite far enough to hit the first support level at 1.3617.
The technical picture has become more bullish as the price has risen again to retest the area of strong resistance at 1.3759, which has held for several days now.
We are seeing a pressured consolidation ready for a bullish breakout, as the U.S. dollar again begins to weaken.
Although the short-term price action is bearish right now, and although the price may now fall again to return to the area near the closest support level which still sits at 1.3617, I am still looking to buy rather than sell this currency pair today.
I will go long following two consecutive hourly closes today above 1.3759 if there is plenty of room left at that point for the price to rise before hitting the next higher resistance level at 1.3822. I am also ready to buy at a bullish bounce which could happen later at 1.3617, although this scenario is much less likely to set up today.
Regarding the GBP, there will be a release of Final Manufacturing PMI data at 9:30am London time. Concerning the USD, there will be a release of ISM Manufacturing PMI data at 3pm London time.