GBP/USD Signal- March 6, 2014

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By: DailyForex.com

 

GBP/USD Signal Update

Yesterday’s signal expired without being triggered as the price did not reach 1.6620.

Today’s GBP/USD Signal

Risk 0.50%.

Entries should be made only before 5pm London time today.

Short Trade

Enter short with a limit sell order on the first touch of 1.6884.

Place the stop loss at 1.6910.

Move the stop loss to break even when the trade is 30 pips in profit. Remove 75% of the position as profit at 1.6785 and let the remainder of the position run.

Long Trade

Enter long on a next bar break of any bullish pin or engulfing hourly bar that prints after the first touch of the 1.6620 support level. After one hour following the close of the first hourly bar below 1.6620, the trade should not be taken.

Put a stop loss 1 pip below the local swing low.

Move the stop loss to break even when the trade is in profit by 25 pips or at 1.6695, whichever comes first. Take 50% of the position as profit, or more if needed to take all the risk off the trade, at 1.6695, and let the remainder of the position run.

GBP/USD Analysis

Yesterday was a fairly quiet but bullish day. The price was unable to fall back to the 1.6620 level. It is not surprising the pair was relatively quiet as we are awaiting high-impact economic data that will be released later today and tomorrow, which is likely to make the pair very volatile

Although the support level at 1.6620 is somewhat “used”, the higher time frame price action is still strongly bullish.

Following the news releases, if the price falls straight through 1.6620, and then goes on to strongly break last week’s low of 1.6582; this will be a very bearish sign that we will fall towards 1.6475.

The supportive level at 1.6620 is very confluent with today’s daily GMT S1 pivot at 1.6630.

There is a very old likely support turned into resistance level at 1.6884. This is quite a long way above us but within range of the price when the high-impact news events are released, so I am looking for a short trade off this level during the London session today, in addition to a possible long if confirmed by price action at 1.6620.

GBPUSD Signal 3614

There are very high-impact data releases due later today. Concerning the GBP, there is the Official Bank Rate, Asset Purchase Facility and MPC Rate Statement at Noon London time. Concerning the USD, an FOMC member is speaking at 1:15, followed by Unemployment Claims data at 1:30. Tomorrow afternoon the Non-Farm Payroll data is released. Therefore this pair should have a quiet morning until about 11:45 London time when it should start to get lively.

Adam is a Forex trader who has worked within financial markets for over 12 years, including 6 years with Merrill Lynch. He is certified in Fund Management and Investment Management by the U.K. Chartered Institute for Securities & Investment.
Learn more from Adam in his free lessons at FX Academy.