GBPUSD: Weak support at 1.2696
Yesterday’s signals were not triggered, as there was no bearish price action at 1.2702.
Today’s GBP/USD Signals
Risk 0.75% per trade.
Trades must be entered before 5pm London time today only.
Long Trades
Long entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of 1.2696 or 1.2642.
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.
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
Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.2828.
Place 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 20 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 yesterday that it was difficult to say what would happen next, even though the situation was more bearish. I preferred a short trade from 1.2702 to a long trade from 1.2642 as there was a long-term bearish trend here in this currency pair. This wasn’t a great call although I was right about seeing direction as hard to predict as the direction turned more bullish over the past day, printing new higher support just below 1.2700. Despite this increase in bullishness, the price is still well within a relatively ranging and choppy area of price action, so the best I can say is that it perhaps make sense to be weakly bullish over the medium-term, even though the long-term trend and arguably the U.K. economic fundamentals are looking relatively bearish.
Today’s action will probably mostly depend upon the U.S. inflation data release due later.
Regarding the USD, there will be a release of CPI (inflation) data at 1:30pm London time. There is nothing of high importance due today concerning the GBP.