GBP/USD Signal- March 24, 2014

 

GBP/USD Signal Update

Last Thursday’s signal was triggered when the price reached 1.6487. It moved a little more than 25 pips into profit which meant moving the stop loss to break even, and was then subsequently stopped out at break even.

Today’s GBP/USD Signal

Risk 0.75%.

Entry may be made between 8am and 5pm London time today.

Long Trade

Enter with a long trade after a next bar break of any bullish pin or engulfing hourly candle occurring after a first touch of 1.6425. Following one hour from the close of the first hourly candle below 1.6425, this signal is invalidated.

Place the stop loss one pip under the local swing low.

Adjust the stop loss to break even once the trade is 25 pips in profit or at 1.6465, whichever occurs first. Leave the trade to ride.

GBP/USD Analysis

The price opened for the week last night right on the long-term bullish trend line that has held since November, and has been rising since then. The supportive level I identified last week at 1.6487 is holding and it appears that it may produce some long pips today which we unfortunately are too late to really take advantage of. This level did produce a long trade last Thursday that broke even but did not really have the momentum to move up into real profit.

The bounce off the trend line, if it holds today, is significant and should mean the start of another move up if this multi-month upwards trend is going to continue. A candlestick analysis on the higher time frames shows a bearish picture on the daily and weekly charts, but is still bullish on the monthly time frame.

Even if we should break down below the bullish trend line, there is a likely supportive level below there at which I am looking for a long trade today, at 1.6425, provided it is confirmed by price action. This level is very confluent with today’s GMT S3 daily pivot level.

GBPUSD Signal 32414

There are no important data releases concerning wither the USD or the GBP scheduled for today. It is likely to be relatively quiet.

Adam Lemon

Adam Lemon began his role at DailyForex in 2013 when he was brought in as an in-house Chief Analyst. Adam trades Forex, stocks and other instruments in his own account. Adam believes that it is very possible for retail traders/investors to secure a positive return over time provided they limit their risks, follow trends, and persevere through short-term losing streaks – provided only reputable brokerages are used. He has previously worked within financial markets over a 12-year period, including 6 years with Merrill Lynch.