My previous GBP/USD signal on 3rd 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 must be entered prior to 5pm London time Tuseday.
Long Trade Ideas
- Go long following a bullish price action reversal on the H1 timeframe immediately upon the next touch of $1.3049, $1.3029, $1.3011, or $1.3000.
- 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 ride.
Short Trade Ideas
- Go short following a bearish price action reversal on the H1 timeframe immediately upon the next touch of $1.3139, $1.3199, or $1.3221.
- 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 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.
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GBP/USD Analysis
I wrote in my previous GBP/USD forecast on 3rd September that the support level at $1.3109 looked pivotal, so I was ready to take a short trade if we had gotten two consecutive lower hourly closes below that level. We did, but not until after London closed, so there was no trade. I was on the right track as the price later rose from this area.
The technical picture has become more bearish, as after we saw a selloff in the US Dollar last week driven by increasing pressure on the Fed to quicken its pace of rate cuts, the greenback has bounced back a little as this week gets underway.
We see the price falling with short-term bearish momentum to a new low for the day, which is not far from the low of recent weeks.
I think the price may drift lower today, but we are unlikely to see dramatic falls as it is a Monday with no major data releases scheduled, so we will probably see a relatively quiet market.
What is most interesting is this cluster of resistance levels between the big round number at $1.3000 and $1.3049 as shown in the price chart below. This area is likely to produce firm support and possibly a medium-term or even long-term bullish reversal if we see a good bullish bounce down there later.
There is nothing of high importance scheduled today concerning either the GBP or the USD.
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