My previous GBP/USD signal on 9th March was not triggered as none of the key support or resistance levels were reached that day.
Today’s GBP/USD Signals
Risk 0.75%.
Trades may only be entered between 8am and 5pm London time today.
Long Trade Idea
- Go long following a bullish price action reversal on the H1 timeframe immediately upon the next touch of $1.2010 or $1.1963.
- Put the stop loss 1 pip below the local swing low.
- Adjust the stop loss to break even once the trade is 25 pips in profit.
- Take off 50% of the position as profit when the price reaches 25 pips in profit and leave the remainder of the position to run.
Short Trade Idea
- Go short following a bearish price action reversal on the H1 timeframe immediately upon the next touch of $1.2142.
- Put the stop loss 1 pip above the local swing high.
- Adjust the stop loss to break even once the trade is 25 pips in profit.
- Take off 50% of the position as profit when the price reaches 25 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 in my previous forecast for the GBP/USD currency pair that it seemed as if the US Dollar had run out of bullish momentum was about to make some kind of pullback.
This was a good call, as the price rose strongly from that area over the day, and the new bullish momentum persisted for several more days.
Recent swinging price action has invalidated a lot of former support and resistance levels, leaving a wide range between $1.2142 and the $1.2000 area in which the price can move quite easily. We have seen the price recover from the big round number at $1.2000 area to rise, and as London opened today, we saw some bullish momentum. Technically, an advance to the next resistance level at $1.2142 looks likely now.
The bullish case is supported by an easing Dollar, and by the UK government’s forecast yesterday that the UK will avoid the formerly-expected recession in 2023, and that UK inflation is set to decline rapidly, which has put some bid into the Pound.
If the price does reach the nearest resistance level at $1.2142 and makes a bearish reversal off it, this could be a good short trade opportunity later as this level technically looks likely to be strong resistance.
Regarding the USD, there will be a release of Unemployment Claims data at 12:30pm. There is nothing of high importance scheduled today concerning the GBP.
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