Last Monday’s GBP/USD signal was not triggered as there was no bearish price action when the price first reached the resistance level of $1.3577 that day.
Today’s GBP/USD Signals
Risk 0.75%.
Trades may only be entered prior to 5pm London time today.
Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.3687.
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 1.3577, 1.3527, or 1.3502.
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 as bulls and bears were quite evenly balanced over the short to medium term, with key support holding at 1.3527, and key resistance holding at 1.3577.
I saw the best strategy for trading this currency pair today as waiting for two consecutive higher hourly closes above 1.3577 to trigger a bullish bias, or two consecutive hourly closes below 1.3527 to trigger a bearish bias.
This was a good call as once the bullish trigger arrived, the price rose by another 15 pips or so over the rest of the day.
The US dollar remains strong, but the British pound is holding up relatively well against it. This suggests that bullish movements are likely to be more interesting than bearish movements here, but there is little momentum in either direction right now.
Just like last Monday, the flipping support/resistance level at 1.3577 is likely to be the day’s major pivotal point.
I will be happy to take a long trade from a bullish bounce at 1.3577 if it sets up later today.
If we get a strongly bullish hourly candlestick during the first half of today’s London session which closes above $1.3650, we will be likely to see the price continue to advance to hit at least the resistance level at $1.3687 by today’s New York close.
Regarding the USD, there will be a release of the ADP Non-Farm Employment forecast at 1:15pm London time, followed by crude oil Inventories at 3:30pm. There is nothing of high importance scheduled concerning the GBP.