My previous GBP/USD signal on 17th October 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 must be taken between 10am and 5pm London time today only.
Long Trade Ideas
- Go long following a bullish price action reversal on the H1 timeframe immediately upon the next touch of $1.2102 or $1.2010.
- 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 $1.2226 or $1.2102.
- 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 there would likely be better opportunities elsewhere than in this currency pair. I expected that the nearest support or resistance levels would not even be reached.
This was a good, accurate call.
The technical picture now is a bit more bullish as although we have a long-term bearish trend, the price has finally broken above what had been a very key resistance level at around $1.2219, which earlier produced a bearish double top.
I now place this level at $1.2226, and it looks likely to be firm support.
The US Dollar is selling off a bit almost everywhere, and while the British Pound is certainly weaker than the Euro, the Dollar weakness has made the picture here a little bullish over the short-term, but only weakly so.
I see the best opportunity which might set up here today as a long scalp trade from a bullish rejection of the support level at $1.2226, but as the Pound is not very strong, such a trade should be carefully monitored, and conservative profit-taking would probably be the most suitable exit strategy.
There may be better opportunities to trade against the US Dollar in the EUR/USD currency pair today.
Concerning the GBP, there will be releases of Flash Services & Manufacturing PMI data at 9:30am London time. Regarding the USD, there will be the same at 2:45pm.
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