Last Monday’s GBP/USD signals were not triggered, as none of the nearby support or resistance levels identified were reached during that day’s London session.
Today’s GBP/USD Signals
Risk 0.75%.
Trades must be taken before 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 1.3920 or 1.4021.
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
Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of 1.3858 or 1.3759.
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 Monday that we had an environment of bearish environment which was matched by a bearish short-term technical picture with the resistance level at 1.3860 holding the price down. I expected a weak down day and so I was looking for a short trade from a bearish reversal at 1.3860.
This was a perfect call as the resistance level at 1.3860 held and the day did end very slightly down on low volatility as I predicted.
The technical picture remains seemingly bearish as we can draw a descending price channel containing the price which is quite symmetrical and holding the price comfortably since 4th March. However, there is a bullish challenge complicating the situation, with new higher support forming and holding persistently at 1.3859, suggesting that the price is now going to move up and challenge the resistance level at 1.3920 which is significant as it is confluent with the upper trend line of the descending price channel.
Overall, we see a mixed picture, with the main thing to watch out for likely to be a bullish breakout beyond 1.3920. If we get two consecutive closes above that level, I think we are likely to see a more sustained rise towards 1.4000 – the line of least resistance here looks likely to be upwards. Much may depend upon the U.S. inflation (CPI) release due later – if this is seen as bearish for the USD, and the price is already above 1.3920, this could provide bullish momentum for a move up to 1.4000 today.
Regarding the USD, there will be a release of CPI (inflation) data at 1:30pm London time. There is nothing of high importance concerning the GBP scheduled for today.