My previous GBP/USD signal on 29th January was not triggered as none of the key support or resistance levels I identified were reached that day.
Today’s GBP/USD Signals
- Risk 0.75%.
- Trades must be taken before 5pm London time today only.
Long Trade Ideas
- Long entry following a bullish price action reversal on the 1H1 time frame H1H1H1 timeframe immediately upon the next touch of $1.2620, $1.2584, or $1.2538.
- 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 1H1 time frame H1H1H1 timeframe immediately upon the next touch of $1.2641 or $1.2715.
- 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 almost two weeks ago that I expected the ongoing medium-term consolidation above $1.2640 and below $1.2786 to continue, so I was looking for reversals from extremes.
This was a good call as the range held, and when it was first tested the next day, there was a strong bullish bounce from $1.2641. The technical picture now is not changed very much. We had a bearish breakdown below the range, but the price has now recovered.
Recent hours have seen the price stuck within a narrow range. The price is likely to break out today, and it seems that the line of least resistance is above the resistance level at $1.2641, not below the support level at $1.2620.
I therefore think that $1.2641 will probably be today’s pivotal point, so I will look for an opportunity to enter a long trade above $1.2641 if we get two consecutive higher hourly closes above that level.
There is nothing of high importance scheduled today concerning the GBP. Regarding the USD, there will be a release of Unemployment Claims data at 1:30pm London time.
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