GBP/USD Signal- April 23, 2014

GBP/USD Signal Update

Yesterday’s signals were not triggered and expired as the price never reached either 1.6753 or 1.6884.

Today’s GBP/USD Signals

Risk 0.75%
Entry must be made before 5pm London time today.

Short Trade 1

Go short after confirming bearish price action on the H1 chart following a first touch of 1.6884.
Place a stop loss 1 pip above the local swing high.
Close the trade at 1.6830.

Long Trade 1

Go long following confirming bullish price action upon the first touch of 1.6753.
Place a stop loss 1 pip below the local swing low.
Move the stop loss to break even when the price reaches 1.6790.
Take off 50% of the position as profit at 1.6790 and the remainder of the position at 1.6880.

GBP/USD Analysis

Nothing very important happened yesterday. We had a move up but we have already given up those gains yesterday morning. The only thing to note is that yesterday we did fail to make a new high, so it may be that we are now due a pull-back which could give a further buying opportunity, perhaps at the support level at 1.6753 which is confluent with a key psychological level of 1.6750.

We do have important GBP news due this morning, and if there are any surprises there will be a big move. It would not be surprising if just after the news we saw a spike either down to 1.6753 or up to 1.6884, and then a reversion with those prices being either the high or low of the day, provided there are no big shocks from the data release.

Despite the good spike opportunities this pair often gives, I would still be cautious enough to wait for price action confirmation on the hourly chart, as we are too close to the significant levels right now.

The long-term picture is still very bullish, the high we failed to make that I mentioned previous would after all have been a 5-year high! We have not broken any significant support levels or the bullish trend line that has held for many months.

GBPUSD Signal

At 9:30am London time there is the UK MPC Asset Purchase Facility and Official Bank Rate Votes which can have a big effect on the GBP. Later at 3pm there will be a release of New Homes Sales data that may affect the USD. Therefore we should expect some more volatility today.

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.