Yesterday’s signals were not triggered as none of the key levels were reached during the session.
Today’s GBP/USD Signals
Risk 0.75% per trade.
Trades may only be entered between 8am and 5pm London time today.
Long Trades
- Long entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of 1.2610, 1.2550 or 1.2521.
- Put 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.
- 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 1
- Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.2831.
- Put 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.
- 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
The Pound fell quite strongly yesterday in two tranches: the first was due to the Governor of the Bank of England making it clear there could be no rate hike in the foreseeable future due to poor consumer spending and some other factors. The second was due to a major rating agency opening a path for the U.K.’s sovereign debt to be downgraded. This is far from happening but triggered a second fall. The general environment has been bearish to fears over political stability in the U.K. as Brexit negotiations with the European Union begin.
The price has now found some support at the anticipated support level of 1.2610. It is worth noting that there are two levels not far below that, so it should be a firm area that will not be cut through quickly. However, the bounce at 1.2610 has not been convincing, so the action still looks quite bearish.
There is nothing due today concerning the GBP. Regarding the USD, there will be a release of Crude Oil Inventories data at 3:30pm London time.