My previous GBP/USD signal on 1st June was not triggered as none of the key support or resistance levels were reached that day.
Today’s GBP/USD Signals
Risk 0.75%.
Trades may only be taken before 5pm London time today.
Long Trade Idea
- Go long following a bullish price action reversal on the H1 timeframe immediately upon the next touch of $1.2562, $1.2535, or $1.2500.
- Put 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 run.
Short Trade Ideas
- Go short following a bearish price action reversal on the H1 timeframe immediately upon the next touch of $1.2602, $1.2645, or $1.2698.
- 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.
- Take off 50% of the position as profit when the price reaches 25 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 in my previous forecast for the GBP/USD currency pair that the technical picture was seeing a consolidation between the round numbers at $1.2300 and $1.2500, or to be precise, $1.2478. Within this area, the only potential opportunity I saw a long trade from a strong bullish bounce that would ideally reject the round number at $1.2400 and quickly bounce back to reach a price above $1.2425.
I was correct to be looking on the long side, as the price rose strongly that day.
The technical picture is now more bullish, with the price having finally broken out of the former upper barrier of the consolidation range just below the big round number at $1.2500.
The British Pound is one of the strongest major currencies, and the price here is close to a 1-year high, powered by a bullish long-term trend.
Fundamental analysts are seeing this currency pair as interesting now due to a perceived policy divergence between a Bank of England still looking to raise rates and the Federal Reserve that is expected to pass on a hike at its meeting this week.
The price has several support levels close below which suggests that the line of least resistance is likely to be upwards, although there are two resistance levels which are also not far away, likely to make any rise choppy.
I think the edge is on the long side, so I look to trade long any bullish bounces at key support today, especially at the round number of $1.2500.
There is nothing of high importance scheduled today oncerning either the GBP or the USD.
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