My previous GBP/USD signal on 23rd January was not triggered as there was no bullish price action when the support level at $1.2687 was first reached that day.
Today’s GBP/USD Signals
- Risk 0.75%.
- Trades may only be taken between 8am and 5pm London time today.
Long Trade Ideas
- Go long following a bullish price action reversal on the 1H1 time frame H1H1H1 timeframe immediately upon the next touch of $1.2641, $1.2596, or $1.2546.
- 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 1H1 time frame H1H1H1 timeframe immediately upon the next touch of $1.2786 or $1.2881.
- 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 almost one weeks ago that the technical picture was looking more bullish as the price chart showed a bullishly ascending linear regression channel, with a succession of higher lows. I saw a rise until about $1.2775 which was not a good call as it did not happen, and the day ended as a down day.
The technical picture now points strongly to the ongoing medium-term consolidation above $1.2640 and below $1.2786. This pattern is so well-established with so few clues as to wider direction that I think it makes sense to look for reversals from these extremes.
Once the price truly breaks out of this range, that will likely be a technically significant development. This probably will not happen until after both currencies’ central banks hold their respective policy meetings later this week.
There is nothing of high importance scheduled today concerning the GBP or the USD.
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