GBP/USD Signal- March 4, 2014
GBP/USD Signal Update
Yesterday’s signal expired without being triggered as the price never reached 1.6620.
Today’s GBP/USD Signal
Entry must be made before 5pm London time today.
Enter long following the next bar break of any bullish pin or engulfing H1 bar that forms following the first touch of 1.6620. After an hour following the close of the first H1 bar to close below 1.6620, the trade is invalidated.
Put the stop loss 1 pip below the local swing low.
Move the stop loss to break even when the trade is in profit by at least 25 pips or at 1.6675, whichever comes first. Take off 50% of the position as profit at 1.6675 and let the remainder of the position run.
Yesterday saw a gentle but still parabolic sell-off above 1.6725, with the daily candle closing as a strongly bearish candle, engulfing the daily candles of last Thursday and Friday. Although the later part of the Asian session has seen the price rise, this suggests that we are going to test the lows that were made last week, which means another trip down to the support at 1.6620.
Although the support at 1.6620 is quite “used”, the weekly and monthly price action is still strongly bullish, and therefore if the price action is bullish following a touch of 1.6620 or prices below that, I see that this could still be a good trigger for another profitable long trade.
However if the price moves straight down past 1.6620 and does not react, and then goes on to surpass last week’s low of 1.6582, this will be a very bearish sign and suggest that we are going to then move down to the next supportive level which is identified at 1.6475.
The supportive level at 1.6620 is quite confluent with today’s daily GMT S1 pivot at 1.6627.
There are no resistance levels appearing strongly reliable above us until1.6870. This price is too far away from where we are now to be of concern.
There is UK data that will be released today at 9:30am London time (Construction PMI). There are no USD data releases scheduled for today. Therefore the pair might be more active this morning, with the news-related sentiment quite likely to set the daily direction today. If the news drives the price down to 1.6620 followed by a bullish reaction, that could be ideal/
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