My previous GBP/USD signal on 20th March was not triggered, as there was no bearish price action when the two resistance levels were first reached.
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 H1 timeframe immediately upon the next touch of $1.2558, $1.2538, or $1.2507.
- 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 $1.2657, $1.2710, or $1.2732.
- 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 the technical picture was dominated by the descending price channel which was likely to drive the price lower. I was looking for a short trade that day.
This was not a great call as the price rose strongly over the course of the day. However, the price quickly fell back to where it had been and has been consolidating below $1.2657 ever since.
The picture looks bearish if the price remains below $1.2657 and looks likely to fall further – the price action looks heavy on the daily chart.
We saw some minor strength in the US Dollar last week, but the Dollar is facing resistance, which is keeping the price from really breaking down here. It may well happen, but probably not today.
As it is a public holiday in the UK today, liquidity and low volatility are likely, so opportunities may be limited and might best be taken in scalping mode. A short trade entry off a rejection of $1.2657 looks attractive.
There is nothing of high importance scheduled today concerning the GBP as it is a public holiday today in the UK. Regarding the USD, there will be a release of ISM Manufacturing PMI data at 3pm London time.
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