Yesterday’s signals could have produced valid long and short trade entries from both nearby support and resistance levels. This indicates it might be best to hedge and trade the next breakout from the range 1.2700 to 1.2756. I have a slight bullish bias so a long from 1.2705 may work out better than a short from 1.2756. However, the Bank of England’s key release later today is likely to create volatility which will run any nearby stops.
Today’s GBP/USD Signals
Risk 0.75% per trade.
Trades must be taken before 5pm London time today only.
Long Trade 1
- Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of 1.2705.
- 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 25 pips in profit and leave the remainder of the position to run.
Short Trade 1
- Go short 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.
- 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 25 pips in profit and leave the remainder of the position to run.
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 price remains stuck between two barriers: the broken bearish trend line and new support below just above the 1.2700 handle, and above, the key resistance level at 1.2756 which is very confluent with the psychological number at 1.2750. I was correct to say yesterday that the pair probably wouldn’t be making dramatic movements any time soon. However, this can change today with a key release due from the Bank of England.
Concerning the GBP, the Bank of England’s Financial Stability Report will be released at 10:30am London time, followed shortly afterwards by the usual press conference. Regarding the USD, there will be a release of CB Consumer Confidence data at 3pm, and the Chair of the Federal Reserve will be speaking at 6pm.