My previous GBP/USD signal on 24th October was not triggered, as the bearish price action took place well above the resistance level which I had identified at $1.2226.
Today’s GBP/USD Signals
Risk 0.75%.
Trades may only 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 $1.2130, $1.2096, 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 $1.2210, $1.2233, or $1.2259.
- 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 I saw the best opportunity which might set up as a long scalp trade from a bullish rejection of a support level. I was completely wrong as the price really fell hard over the day.
The technical picture now has become more interesting, as after falling quite hard due to the strong long-term bullish trend in the US Dollar, and the relative weakness of the British Pound, we have seen the price find support over the past few days above the big round number at $1.2000. It seems this is an area well-defended by bulls, although there is not much bullish impulse. However, it might well be that we see a long-term bullish reversal from this price area, so it could be worth a speculative long position trade from these nearby support levels if we see bounces there.
There is very important US data due later today, so if there are any surprises, the price might fly anywhere, which could ruin any trade put on before that moment. However, the volatility following that might also provide an opportunity for a trade entry on a price spike.
Concerning the USD, there will be releases of the ADP Non-Farm Employment Change Forecast at 12:15pm London time, ISM Manufacturing PMI and JOLTS Job Openings at 2pm, and the FOMC Federal Funds Rate and Statement at 6pm. There is nothing of high importance scheduled regarding the GBP.
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