My previous GBP/USD signal on 21st June produced a profitable long trade from the bullish doji candlestick on the hourly chart which rejected the support level which I had identified at $1.2698.
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 $1.2698 or $1.2627.
- 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 $1.2748, $1.2804, or $1.2862.
- 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 price was going to be more influenced by the just-released and unexpectedly high British inflation data and the testimony by Fed Chair Jerome Powell due later. I, therefore, thought the price would likely rise until the testimony before falling as Powell would probably strengthen the Dollar, so I was looking for a short trade entry.
As it turned out, the best opportunity was instead a long trade entry, with the release of the UK inflation data eventually causing the price to fall, as the data was poor enough to cause wider concerns about the prospect for the UK economy, before the price found support during the first half of the London session and pushed up from that low. A sizable doji candlestick rejecting support or resistance can often be a great technical signal for a new trade entry.
The price of this currency pair has recently reached multi-month highs, but over recent days we have seen both he Pound and the Dollar consolidate, so this has become one of the most boring currency pairs.
The price is now consolidating within quite a narrow range of one big figure, with support near $1.27, resistance near $1.28, and a key level right in the middle confluent with $1.2750. It is likely that today the price will continue to move little, meaning that provided the price remains within this range, there could be opportunities for cautious scalping trades from rejections of any of these levels, especially the extreme ones at the round numbers which I mentioned earlier.
Concerning the USD, there will be a release of CB Consumer Confidence data at 3pm London time. There is nothing of high importance due today regarding the GBP.
Ready to trade our free Forex signals? Here is our list of the top UK Forex brokers worth reviewing.