Last Wednesday’s GBP/USD signals were not triggered as there was no suitable price action when the price first reached any of the key levels.
Today’s GBP/USD Signals
Risk 0.75%.
Trades may only be entered between 8am and 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 1.3773 or 1.3869.
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
Long entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of 1.3653 or 1.3617.
Place 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.
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 Wednesday that the technical picture had become more bearish, but support below, confluent with the big psychological quarter-level at 1.3750, also looked likely to be strong.
Therefore, I was prepared to take a long trade from a bounce at 1.3753 or a short trade from a bearish reversal at 1.3810.
I was correct about the generally bearish direction as Wednesday was a down day, but I was wrong about the key levels holding.
The U.S. dollar has found some strength despite its recent weakening within a long-term bullish trend, so has been rising in line with its long-term trend. Until a couple of hours ago from the time of writing, the British pound was the weakest major currency. However, we have begun to see a little buying of this currency pair as the Asian session concluded which has pushed the price up a bit, but the rise is far from convincing.
The support below at 1.3653 marks a long-term low and so is likely to be very pivotal – it has already made its presence felt over recent hours as support although it has not been reached yet.
I am prepared to take a long trade from a bullish bounce at 1.3653, or if this level breaks down, a short trade following two consecutive hourly closes below the level.
A short trade would likely have more potential, so any long trade should be carefully monitored on a short time frame.
Concerning the USD, there will be a 10-year bond auction at 6pm London time. There is nothing of high importance due today regarding the GBP.