Last Monday’s GBP/USD signal was not triggered as the bullish price action occurred slightly below the level identified at $1.3512 that day.
Today’s GBP/USD Signals
Risk 0.75%.
Trades may only be entered before 5pm London time today.
Long Trade Ideas
- Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of $1.3458 or $1.3401.
- Place the stop loss 1 pip below the local swing low.
- Move the stop loss to break even once the trade is 25 pips in profit.
- Remove 50% of the position as profit when the price reaches 25 pips in profit and leave the remainder of the position to ride.
Short Trade Ideas
- Go short following a bearish price action reversal on the H1 time frame timeframe immediately upon the next touch of $1.3587 or $1.3664.
- Place the stop loss 1 pip above the local swing high.
- Move the stop loss to break even once the trade is 25 pips in profit.
- Remove 50% of the position as profit when the price reaches 25 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 Monday that the price was probably going to be quiet and directionless over the day. I expected that the price would remain between $1.3512 and either $1.3552 or $1.3587. This was correct apart from a brief dip below $1.3512.
There has been little change to the technical picture in this currency pair since Monday. The former support level at $1.3512 and resistance level at $1.3552 have been invalidated. The price is basically consolidating just above the big round number at $1.3500 and is bound by a range between $1.3458 and $1.3587. This means that the price has more than 100 pips to chop around in. I strongly believe this range will hold today, but tomorrow’s US CPI (inflation) data release could change that.
I think the price movement within the range will be choppy, so I would refrain from trading this pair today except from a bullish reversal at $1.3458 or a bearish reversal at $1.3587.
There is nothing of high importance scheduled for today concerning either the GBP or the USD.