GBP/USD: 1.3072 level looks extremely pivotal
Last Thursday’s signals were not triggered as there was no suitable price action at any of the key levels which were reached before the end of the London session.
Today’s GBP/USD Signals
Risk 0.75% per trade.
Trades must be entered before 5 pm London time today only.
Short Trade Ideas
- Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.3153, 1.3191, or 1.3200.
- Place 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.
- 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.
Long Trade Ideas
- Long entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of 1.3072.
- Place 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.
- 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
I wrote last Thursday that due to the strong support at 1.3072 and the seemingly strong momentum of the bullish move away from that I level, I was ready to take a bullish bias if we had gotten two consecutive hourly closes above 1.3134 today with the second close above 1.3150.
This was a good call, as we did get this pattern after New York opened following some initially firm resistance around the 1.3134 area, with the price rising by approximately a further 60 pips before the rise peaked.
It is interesting that the bullish rises from the 1.3074 area of support keep running out of steam, with the price coming down quite strongly to test what seems to be a very pivotal support level here.
It now looks obvious that the next decisive price movement here will be determined by whether this support level at .3074 holds or breaks down.
A long trade from 1.3074 is possible but I would be more excited by a short trade if the level holds for a while today then breaks down decisively. However, bears would need to beware of new buying kicking in as the price then approached the big round number at 1.3000.
There is nothing of high importance due today regarding either the GBP or the USD.