Yesterday’s signals were not triggered, as none of the key levels were ever reached.
Today’s GBP/USD Signals
Risk 0.75% per trade.
Trades may only be entered before 5pm London time today.
Long Trades
Long entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of 1.3398, 1.3286 or 1.3221.
Put the stop loss 1 pip below the local swing low.
Adjust the stop loss to break even once the trade is 25 pips in profit.
Remove 50% of the position as profit when the price reaches 25 pips in profit and leave the remainder of the position to run.
Short Trade
Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.3456.
Put the stop loss 1 pip above the local swing high.
Adjust the stop loss to break even once the trade is 20 pips in profit.
Remove 50% of the position as profit when the price reaches 20 pips in profit and leave the remainder of the position to run.
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.
GBP/USD Analysis
Yesterday’s FOMC release and rate hike counter-intuitively weakened the Dollar and gave this pair the opportunity to make a quick bullish move. The move was not very big, but it looks as if it may have produced new support confluent with the round number at 1.3400. There is a weak long-term bullish trend and the shorter-term trend is aligned with that, which is usually a sign to be bullish.
There is major data due later for both sides of the pair, so we could see a lot of volatility before and after New York opens. It looks like long trades are likely to perform better and I have a bullish bias. In the very unlikely event of a British rate hike, the pair would probably shoot upwards dramatically. More realistically, if the increased inflation produces more hawkish language from the Bank of England, that should also induce some upwards movement.
Concerning the GBP, there will be a release of Retail Sales data at 9:30am London time, followed by the MPC Official Bank Rate Votes, Monetary Policy Summary, and Official Bank Rate at Noon. Regarding the USD, there will be releases of Retail Sales and Unemployment Claims data at 1:30pm.