GBPUSD: Bearish breakdown below 1.3000
Last Thursday’s signals were not triggered, as there was no bullish price action when 1.3057 was first reached.
Today’s GBP/USD Signals
Risk 0.75% per trade.
Trades must be taken before 5pm London time today only.
Long Trade Idea
Long entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of 1.2870.
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 Ideas
Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.3015 or 1.3090.
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 last Thursday that the price was ranging and that it would probably take the release of U.S. data later to create any significant price movement. I was wrong about that, but I was correct to look for the price to find some support at or close to 1.3000.
The picture has become more bearish as we see in the price chart below, where a medium-term bearish trend line can now be drawn. In fact, we could make this a bearish channel if drew a parallel lower line which would easily be valid. The price has just broken below 1.3000 and the former support at 1.3015 may now have become resistance.
If the price can make a couple of consecutive hourly closes below 1.2995, I would take a bearish bias on this pair today. There is plenty of room for the price to fall without hitting any support as there are no key support levels until 1.2870.
Brexit is now only 2 weeks away and markets are starting to focus more intensely upon its terms.
There is nothing of high importance due today regarding either the GBP or the USD.