My previous GBP/USD signal on 9th September was not triggered because there was no bullish price action when the support level at $1.3109 was first reached.
Today’s GBP/USD Signals
- Risk 0.75%.
- Trades may only be taken before 5pm London time Wednesday.
Long Trade Ideas
- Long entry following a bullish price action reversal on the H1 timeframe immediately upon the next touch of $1.3155, $1.3111, or $1.3054.
- 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 run.
Short Trade Ideas
- Short entry following a bearish price action reversal on the H1 timeframe immediately upon the next touch of 1.3199, $1.3244, or $1.3316.
- 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 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.
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GBP/USD Analysis
I wrote in my previous GBP/USD forecast on 9th September that the price was likely to drift lower over the day, but would probably find support within the area between $1.3000 and $1.3049 due to the cluster of support levels within that zone. This was a good and accurate call, both for that day, and for the days afterwards, with two major lows being made above $1.3000.
We have now seen a selloff from the area of an inflection high below $1.3250 which was reached yesterday.
The price is now sitting quite heavily on the support level at $1.3155. This may be the day’s pivotal point, at least before the Federal Reserve’s policy release later. Price action suggests we will see a bearish breakdown and a small move lower for a while.
The main event today will of course be the Fed, which is universally expected to make its first rate cut in 4 years. The question is whether it will be a cut of 0.50% or 0.25%. If it is 0.50%. we can expected upwards movement in the price. If it is 0.25%, we will probably see a more dramatic move, but a bearish one where the US Dollar strengthens quite dramatically.
Before the Fed, the best course of action will likely be short scalps based on bearish price action on short-term charts below $1.3150, targeting $1.3111.
Concerning the GBP, there will be a release of CPI (inflation) data at 7am London time. Regarding the USD, there will be a release of the Federal Funds Rate, Statement, and Economic Projections at 7pm.
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