GBP/USD Signal Update
Last Thursday’s signal was not triggered and expired.
Today’s GBP/USD Signal
Risk 0.75%.
Entries may only be made between 8am and 5pm London time.
Long Trade
Enter long with a limit order at 1.6620.
Place the stop loss 25 pips away at 1.6595.
Move the stop loss to break even when the trade is 25 pips in profit, and take 75% of the position as profit. Leave the rest of the position to ride.
GBP/USD Analysis
Unfortunately my reluctance to trade off 1.6620 at the end of last week meant I missed a nice, profitable long trade as we saw another, stronger bounce off this level. We ended the week not far from the multi-year highs of two or three weeks ago at around 1.6820. It is hard to say whether the price will keep rise to meet or exceed those levels before returning to 1.6620. In any case, we are far enough away from 1.6620 to consider a touch long trade should the price reach 1.6620 during today’s London session.
Candlestick analysis on the higher time frames shows bullishness on the daily chart, but last week was unable to bullishly engulf the previous week. The monthly chart however does show a bullish engulfing candle just closed, so overall the higher time frames are forecasting a further move upwards.
Christopher Lewis broadly agrees with my analysis and sees this pair as heading towards 1.7000.
There are no really good identifiable resistance levels above us at which to look for short trades before 1.6870. Although this is quite a long distance from the current price, due to the strength of the bullish trend I would want any short trade here to be confirmed by price action before making any entry.
UK-related data will be released at 9:30am London time (Manufacturing PMI). At 3pm there will be the release of ISM Manufacturing PMI data concerning the USD. It therefore seems likely the pair should have some activity throughout the day, although as a Monday it is likely to be relatively quiet.