GBP/USD: Bearish trend line is suppressing the price
Yesterday’s signals were not triggered as neither of the key levels have been reached yet.
Today’s GBP/USD Signals
Risk 0.75% per trade.
Trades may only be entered before 5pm London time today.
Short Trade Ideas
Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.3036 or 1.3094.
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 20 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
I wrote yesterday that I thought that 1.2950 would probably hold but that we may well see the price get established below that level Tuesday. I took a generally bearish bias.
I think this was a good call as although the price at the time of writing is just slightly higher than it was 24 hours ago, there is bearish momentum over the short term and it looks clear that there are likely to be lower prices today after the price has struggled to rise much beyond 1.3000.
Both the Euro and the Pound are bearish but the Pound more so as Brexit approached in only 10 days, the economic terms of which seem to be heading towards a harder Brexit which is bad for the Pound.
Technically, we have a medium-term bearish trend which is clear, but we see buying every time the price gets close to 1.2950. Therefore, while it is OK to be cautiously bearish right now, or to take a short trade from 1.3036, there will be a much greater chance of a strong fall in the price once it can get established below 1.2950. I would take a bearish bias in either of these set-ups and would not want to take any long trade today.
There is nothing of high importance due today concerning either the GBP or the USD.