Last Monday’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, and unfortunately the low of the day did not quite reach the lower support level at $1.3741.
Today’s GBP/USD Signals
Risk 0.75%.
Trades must be taken between 8am and 5pm London time today only.
Short Trade Ideas
Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of $1.3790 or $1.3852.
Put the stop loss 1 pip above the local swing high.
Adjust the stop loss to break even once the trade is 20 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 run.
Long Trade Idea
Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of $1.3741.
Put the stop loss 1 pip below the local swing low.
Adjust the stop loss to break even once the trade is 20 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 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 last Monday that as the price chart was technically dominated by the strong double bottom made below the current price level at $1.3741, we would probably see bullish price movement over the day, but the lower highs made above $1.3800 over the past few days suggested that the price would struggle to advance much beyond that round number.
I thought that the best opportunity here would be a long scalp from $1.3741.
This was partially a good call as the low of the day was made just a pip or two above $1.3741, although it wasn’t really an up day overall, with the price closing almost unchanged.
The technical picture now looks very consolidative, with few key support or resistance levels nearby. Again, the level which stands out as important in the price chart below is the support at $1.3741 which looks pivotal – if the price breaks below it and holds there for a couple of hours, this will likely be a bearish sign of a further imminent fall in the price.
I do not have much faith in the resistance level I drew at $1.3790, but it might have an impact.
Today’s direction is anybody’s guess. I think the price might easily fall back down to $1.3741 and everything will then depend upon what happens there.
Regarding the GBP, the UK Government will release its Annual Budget at approximately 2pm London time. There is nothing of high importance scheduled regarding the USD.