.Last Wednesday’s GBP/USD signal was not triggered as none of the key levels identified as support or resistance were reached that day.
Today’s GBP/USD Signals
Risk 0.75%.
Trades must be taken before 5pm London time today only.
Short Trade Ideas
Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.3804 or 1.3811.
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 1.3654 or 1.3574.
Place the stop loss 1 pip below the local swing low.
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.
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 remained weakly bullish / consolidative above the support level at $1.3587. I thought that this level should continue to be an attractive price to use to enter short-term long trades on lower timeframes.
The price did not return to that level, but my weakly bullish bias proved to be correct as the price has risen since then.
Recent long-term strength in the US dollar has paused somewhat over recent days, but the pound has advanced nicely showing some relative strength. This is partly because the governor of the Bank of England has been commenting publicly about the possible impending need for a rate hike to dampen increasing inflationary pressures. The prospect of rate hikes is seen as boosting the currency more than the fear of inflation is seen as weakening it, for the time being.
Technically, the price is in a bearish retracement within a medium-term bullish movement. The price is now sitting on the support level at about 1.3725. If the price holds below that level after the London open for an hour or so, we will be likely to see a down day or choppy sideways trading. However, if the level holds up, we will be more likely to see an advance over the day. There are no other key levels nearby which look especially attractive.
There is nothing of high importance scheduled today regarding either the GBP or the USD.