Yesterday’s signals may have produced a losing trade from a bullish pin candle rejection of the support level identified at 1.3362, although it wasn’t a great pin candle so might have been avoided.
Today’s GBP/USD Signals
Risk 0.75% per trade.
Trades must be taken before 5pm London time today only.
· Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of 1.3332 or 1.3286.
· Place the stop loss 1 pip below the local swing low.
· Move the stop loss to break even once the trade is 25 pips in profit.
· Take off 50% of the position as profit when the price reaches 25 pips in profit and leave the remainder of the position to ride.
· Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.3456.
· Place the stop loss 1 pip above the local swing high.
· Move the stop loss to break even once the trade is 20 pips in profit.
· Take off 50% of the position as profit when the price reaches 20 pips in profit and leave the remainder of the position to ride.
The best method to identify a classic “price action reversal” is for an hourly candle to close, such as a pin bar, a doji, an outside or even just an engulfing candle with a higher close. You can exploit these levels or zones by watching the price action that occurs at the given levels.
I was broadly right yesterday in not expecting a big directional movement, but the one key level which was hit did not hold after initially appearing as if it would. There is no change to the technical picture: bearish trend lines and a resistance level at 1.3456 above, buying between about 1.3300 and 1.3332. Although there is news due today, it is unlikely to move the price much, so the key levels and trend lines in the chart below look as if they are going to hold. If the price is above 1.3420 at 9am London time, it will probably go on to reach 1.3456 later in the London or New York sessions. There is no long-term trend in this currency pair, and I have no directional bias.
Concerning the GBP, the Governor of the Bank of England will be testifying about the latest Financial Stability Report before Parliament at 1:15pm London time. Regarding the USD, there will be a release of Crude Oil Inventories data at 3:30pm.