My previous GBP/USD signal on 12th June was not triggered as there was no bullish price action when any of the key support levels were reached that day. Unfortunately, the day’s high was just 3 pips below the nearest resistance level.
Today’s GBP/USD Signals
Risk 0.75%.
Trades must be entered prior to 5pm London time today only.
Long Trade Idea
- Long entry following a bullish price action reversal on the H1 timeframe immediately upon the next touch of $1.2726, $1.2698, or $1.2627.
- Place the stop loss 1 pip below the local swing low.
- Move 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 25 pips in profit and leave the remainder of the position to ride.
Short Trade Ideas
- Short entry following a bearish price action reversal on the H1 timeframe immediately upon the next touch of $1.2768, $1.2804, or $1.2862.
- Place the stop loss 1 pip above the local swing high.
- Move 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 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 in my previous forecast for the GBP/USD currency pair that the technical picture was looking bullish with several close support levels, so I was looking to enter a long trade at a bounce at any support level.
The price in fact fell over the day, so I was wrong, but waiting for a bounce at support which never happened was at least enough to keep out of trouble.
We have seen the British Pound gain strength over the past week or two, reaching a new 1-year high price last week, although it has been falling off over the past few days as US Dollar strength resumed.
Unfortunately, technical factors are likely to be of secondary importance today as we will get testimony from the Chair of the Fed about monetary policy before Congress, following the earlier release of British CPI (inflation) data which was expected to show a decline to 8.4%, but showed no change from 8.7%. This has boosted the value of the Pound as it makes rate hikes more likely from the Bank of England. However, the boost in the Pound seems to be very short-lived.
As we have several hours before Powell’s testimony, it will likely make sense to look for a short trade from a failed test of any resistance level, as it seems probable that Powell’s testimony will drive the price here down by strengthening the relative value of the US Dollar.
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Concerning the USD, Fed Chair Jerome Powell will be testifying before the House of Representatives at 3pm.
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