Last Wednesday’s GBP/USD signals were not triggered, as none of the key levels were reached that day.
Today’s GBP/USD Signals
Risk 0.75%.
Trades may only be taken prior to 5pm London time today.
Short Trade Idea
Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.3997.
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 1.3879, 1.3845, or 1.3818.
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 Wednesday that the picture had become considerably more bullish as we had a sustained bullish breakout beyond the 1.3759 level.
I was confident enough to take a bullish bias here if we had gotten two consecutive hourly closes above 1.3825 after London opened.
This was a logical call although it did not work out so well, as we did get the two closes above 1.3825 but the price then fell slightly over the course of the day. However, Thursday and Friday saw the price rise strongly, so it was a good call over the medium term if not the short term.
The price reached a new 2.5 year high during the Asian session earlier today, trading just a little above the round number at 1.3900. We are now seeing what appears to be a normal, shallow bearish retracement as the London open approaches. The key thing to watch for now will likely be whether the nearby support levels hold. The U.S. dollar is broadly weak and longs in this currency pair still seem to be good bets.
I will be happy to take a long trade if we get a bullish bounce at either 1.3879 or 1.3845 during the first half of today’s London session. I do not want to enter any new trades later than that as markets are closed in the U.S. today, so trading volumes are likely to strongly tail off well before 5pm London time.
There is nothing of high importance scheduled today regarding the GBP. It is a public holiday in the U.S. today so of course there is nothing scheduled concerning the dollar.