GBP/USD Signal Update
There is no outstanding signal for this pair.
Today’s GBP/USD Signal
Risk 0.50%.
Entry must be made between 8am and 2pm London time today.
Long Trade
Enter long with a limit buy order following the first touch of 1.6487.
Place the stop loss at 1.6440.
Adjust the stop loss to break even when the price is 20 pips in profit. Once the price is 40 pips in profit, use a trailing stop at half of the maximum profit reached. Remove 75% of the position as profit at 1.6544, and leave the remaining 25% of the position to run.
GBP/USD Analysis
This pair has been going sideways for about a week with significant support and resistance level sitting too far away to be of concern. Today we are coming within range of a likely good support level at 1.6487. There is a chance that the major U.K. economic data that will be released during this morning’s London session could send the price down in a spike that would reach this level. Unless the numbers are a complete disaster for the U.K. we will almost certainly get some kind of bounce there. This type of spike trade requires a fast move to break even and some kind of trailing stop to work best in these conditions.
There is a kind of subdued bearishness apparent from a candlestick analysis on the daily and weekly charts, although the monthly chart continues to look bullish. The momentum has simply run out of steam but the bears have not been strong enough to really drive the price down. Despite this, a technical analysis is a little superfluous right now as we have such major data releases due today and this is what is going to push the price around over the coming hours. On the balance of probability, the market will probably take a fall in price down to the 1.6500 area more “naturally” than any rise that might occur before we reach that zone.
We are still well secured within a wide, long-term bullish channel that has been established since November last year. Soon, the lower trend line of that channel will be confluent with the supportive level at 1.6487, which should then be an even more attractive level to buy at.
There are major U.K. data releases scheduled for 9:30am London time today: the Claimant Count Change, the Unemployment Rate, and the voting details of the MPC on the Asset Purchase Facility and the Official Bank Rate. Later, at 6pm London time, the FOMC statement and projections will be released, which may be a major market event. It can be expected that this pair will have a lively day before New York closes.