Last Wednesday’s GBP/USD signal was not triggered as there was no bullish price action when the support level identified at $1.3773 was first reached that day.
Today’s GBP/USD Signals
Risk 0.75%.
Short Trade Ideas
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Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of $1.3852 or $1.3898.
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Place the stop loss 1 pip above the local swing high.
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Move the stop loss to break even once the trade is 20 pips in profit.
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Remove 50% of the position as profit when the price reaches 20 pips in profit and leave the remainder of the position to ride.
Long Trade Idea
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Long entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of $1.3773 or $1.3741.
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Place the stop loss 1 pip below the local swing low.
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Move the stop loss to break even once the trade is 20 pips in profit.
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Remove 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 Wednesday that as the price had fallen slightly since the UK inflation data release earlier that day, if we got two consecutive lower hourly closes below $1.3773 during the first half of the day’s London session, I would be ready to take a bearish bias on this currency pair.
Fortunately, although these bearish closes happened, the second one finished just after the first half of the London session, as it would have been a losing trade.
The price chart is technically dominated by the strong double bottom made below the current price level at $1.3741, which has pushed the price up enough to re-establish the next higher support level at $1.3773. This suggests that we will see bullish price movement today, but the lower highs made above $1.3800 over the past few days suggest that the price will struggle to advance much beyond that round number.
In the absence of any strong trend in this currency pair, I do not see much likely opportunity here except maybe a long scalp from $1.3741 if the price takes a downturn and reaches that double bottom level later today.
There is nothing of high importance scheduled today regarding either the GBP or the USD.