GBP/USD Forex Signal - 27 August 2015

GBP/USD Signals Update

Yesterday’s signals expired without being triggered as there was no bullish price action during the London session.

Today’s GBP/USD Signals

Risk 0.75% per trade.

Trades must be entered between 8am and 5pm London time today only.

 

Long Trade 1

  • Long entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of 1.5416.

  • 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.

  • Remove 50% of the position as profit when the price reaches 1.5490 and leave the remainder of the position to ride.

 

Short Trade 1

  • Short entry following a bearish price action reversal on the H1 time frame immediately upon the next entry into the zone between 1.5533 and 1.5561.

  • 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.

  • Remove 50% of the position as profit when the price reaches 1.5460 and leave the remainder of the position to ride.

GBP/USD Analysis

This pair has been very quiet, and the GBP had held up against the USD quite nicely lately. However this all changed yesterday as the GBP sold off heavily along with the Euro. What was most interesting technically about this very sharp fall, was that we broke cleanly through a very strong supportive confluence above 1.5500, and this is probably now going to flip to resistance. Additionally, we broke a long-term bullish trend line, which is currently sitting just above the round number at 1.5500, and seems now to be acting as resistance rather than support. So it looks as if yesterday was a crucial day for this pair, shifting the overall bias from bullish to bearish.

I’m not looking to short off the trend line just yet. If we break above that today and hold there, then quite possibly there will be some chop for a while rather than any further meaningful moves down.

The next support is at 1.5416 and below that there is a big gap without obvious strong support.

GBPUSD Signal

There is nothing concerning the GBP due today. Regarding the USD, there will be a release of Preliminary GDP and Unemployment Claims data at 1:30pm London time.

Adam Lemon

Adam Lemon began his role at DailyForex in 2013 when he was brought in as an in-house Chief Analyst. Adam trades Forex, stocks and other instruments in his own account. Adam believes that it is very possible for retail traders/investors to secure a positive return over time provided they limit their risks, follow trends, and persevere through short-term losing streaks – provided only reputable brokerages are used. He has previously worked within financial markets over a 12-year period, including 6 years with Merrill Lynch.