My previous GBP/USD signal on 20th December produced a losing long trade from the bullish doji hourly candlestick which rejected $1.2653.
Today’s GBP/USD Signals
Risk 0.75%.
Trades must be entered between 8am and 5pm London time today only.
Long Trade Ideas
- Long entry following a bullish price action reversal on the H1 timeframe immediately upon the next touch of $1.2699, $1.2651 or $1.2616.
- 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
- Short entry following a bearish price action reversal on the H1 timeframe immediately upon the next touch of $1.2786 or $1.2881.
- 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 in my previous forecast for the GBP/USD currency pair almost two weeks ago that the picture looked bearish, but there was a chance of a long scalp trade from $1.2653. This was a good call as I was correct about both, with a small scalp possible from that support level early in the London session.
The technical picture is more consolidative now, as we see choppy price action above support confluent with the round number at $1.2700. This currency pair has done little during the Asian session but will likely get livelier as the London session begins. Direction in the Forex market is unclear although there is a long-term bearish trend in the US Dollar. However, the Pound is not a relatively strong currency, so it is far from clear that the price will be likely to rise.
The start of a New Year typically brings volatile, choppy price action. So, I think given the consolidative technical indicators, we are likely to see the price continue to consolidate today above the support confluent with $1.2700.
If I am correct, the best potential opportunities which might set up today will be a long scalp from $1.2700 or a short scalp from $1.2786.
Beyond the resistance level at $1.2786, the price has about 100 pips to rise, to two consecutive higher hourly closes above that level during the first half of the London session would be a bullish sign.
There is nothing of high importance scheduled today concerning either the GBP or the USD.
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