My previous GBP/USD signal on 21st February was not triggered as the bullish price action took place below the support level which I had identified at $1.2617.
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 H1 timeframe immediately upon the next touch of $1.2590 or $1.2558.
- 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 $1.2715 or $1.2786.
- 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 last Wednesday that the technical picture had become dull, although there were two bullish technical features:
- The clear support level at $1.2617
- The short-term ascending upper trend line, with a hint of a lower symmetrical trend line. If the lower trend line becomes obvious, the price channel would then carry much more weight.
I thought the day would be an up day, and I was correct about that.
The technical picture has not changed much since then. The price has slowly broken down below the bullish channel which it had seemed to be following, but the price action remains weakly bullish.
There is a clear pattern of higher lows which is bullish, but we have also seen the price reject the $1.2715 area twice recently, giving a potentially bearish double top.
I think the price will remain in the range between $1.2715 and $1.2590 today, so a reversal off either level could be a good trade worth taking. I slightly prefer a long trade as we have weak bullishness over both the long and short terms.
There is nothing of high importance scheduled today concerning either the GBP or the USD.
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