My previous GBP/USD signal on 2nd October was not triggered, as there was no bullish price action when either of the identified support levels were first reached.
Today’s GBP/USD Signals
Risk 0.75%.
Trades must be entered before 5pm London time today.
Long Trade Ideas
- Long entry following a bullish price action reversal on the H1 timeframe immediately upon the next touch of $1.2102 or $1.2010.
- 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 $1.2219 or $1.2267.
- 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 the price action was again looking heavy and bearish, suggesting another breakdown was very likely to happen soon.
I was ready to enter a short trade if we got two consecutive lower hourly closes below $1.2175 during the first half of the day’s London session.
This was a great call and would have produced a nicely profitable short trade if followed.
The technical picture now is more suggestive of short-term consolidation, although key US data to be released later today might affect the price. The price is showing wide-ranging action in the middle of a zone between support and resistance, with some bearish momentum.
I think there may be better opportunities elsewhere today than in this currency pair. However, in the unlikely event that any of the nearest support or resistance levels are reached and rejected, reversal trades with conservative management might give some profit.
Regarding the USD, there will be a release of Retail Sales data at 1:30pm London time. There is nothing of high importance scheduled today concerning the GBP.
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