My previous GBP/USD signal on 8th February was not triggered as the bullish price action took place below the key support levels.
Today’s GBP/USD Signals
- Risk 0.75%.
- Trades may only be entered between 8am and 5pm London time today.
Long Trade Ideas
- Go long following a bullish price action reversal on the 1H1 time frame H1 timeframe immediately upon the next touch of $1.2571, $1.2538, or $1.2507.
- 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 time frame immediately upon the next touch of $1.2652 or $1.2715.
- 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 a few days ago that I expected a breakout above the resistance $1.2641, not a breakdown below the support level at $1.2620. I was correct about $1.2641 being the day’s important pivotal point, but wrong about the bullish breakout, as the price did break lower.
The technical picture now is somewhat more bullish, but it is not clear that the price will be able to advance beyond the $1.2650 area where this strong resistance which was previously showing at $1.2641 seems to be centred now.
Strong UK jobs data released earlier today were surprising, pushing the pound up to near the resistance at $1.2652 which looks likely to be today’s pivotal point.
I again see the best opportunities today as likely to be either a short trade from a bearish rejection of $1.2652, or a long trade once the price has become established above that level, say after two consecutive higher hourly closes above $1.2652.
However, traders should be very cautious as the US CPI data release approaches (scheduled for shortly after the start of the New York session). This is very high-impact data and could push the price of this currency pair or any other Dollar pair to prices with no regard for technical factors.
There is nothing of high importance scheduled today concerning the GBP. Regarding the USD, there will be a release of CPI (inflation) data at 1:30pm London time.
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