My previous GBP/USD signal on 7th November was not triggered.
Today’s GBP/USD Signals
- Risk 0.75%.
- Trades must be taken prior to 5pm London time Wednesday.
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Long Trade Ideas
- Go long following a bullish price action reversal on the 1H1 time frame H1H1H1 timeframe immediately upon the next touch of $1.2813, $1.2785, or $1.2727.
- 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 Idea
- Make a short entry following a bearish price action reversal on the 1H1 time frame H1H1H1 timeframe immediately upon the next touch of $1.2958, $1.2977, $1.3019, $1.3035, or $1.3060.
- 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.
GBP/USD Analysis
I wrote in my previous GBP/USD forecast last week that the technical picture looked confused so we were likely to see the price trade in a range. This was partially true but my support and resistance levels were not respected, so it was not useful.
The picture now is much more bearish, as the ‘Trump Trade’ seems to finally be decisively driving the US Dollar lower. We are seeing European currencies such as the British Pound showing relative weakness in the market, so this currency pair is one to focus on.
The price has fallen steadily lower during today’s Tokyo session and has bottomed so far at the support level at $1.2813.
I see the best strategy is to look only for small long scalp trades at support like $1.2813, but to focus instead on a bigger opportunity which would be a bearish rejection of the nearest resistance level at $1.2877.
Alternatively, if we get two consecutive lower hourly candlesticks below the support at $1.2813, it might be possible to enter a short trade there, but it could be high risk.
There was a release of UK Claimant Count Change (Unemployment Claims) data this morning, which came in just a little better than expected.
There is nothing of high importance due today concerning the GBP or the USD.
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