GBP/USD Forex Signal

Monday, 5 February 2018 8:42

Last Thursday’s signals were not triggered, as neither of the key price levels were reached within the specified time.

Today’s GBP/USD Signals

Risk 0.75% per trade.

Trades may only be taken between 8am and 5pm London time today.

Long Trade

  • Long entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of 1.4092.

  • 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 1.4168.

  • Put the stop loss 1 pip above the local swing high.

  • 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.

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

Last week I was bullish and looking for a long trade entry at a bullish bounce at 1.4092. With Friday’s renewed strength in the U.S. Dollar, the price has made a deep pullback and finally hit this level during today’s Asian session. The overall outlook is less bullish for this pair, especially as there is a new lower resistance level established at 1.4168, but the level at 1.4092 could still hold and give another leg up. However, 1.4168 looks attractive for a short trade. This is a relatively narrow range, with a lot of room to move either up or down, and as we have seen a lot of volatility in this pair recently, the movement is likely to happen. There may be a more negative sentiment on the Pound today, with comments from the Prime Minister’s office stating that the U.K. will not remain within the single market following its exit from the European Union.

GBPUSD

Regarding the GBP, there will be a release of Services PMI data at 9:30am London time. Concerning the USD, ISM Non-Manufacturing PMI data at 3pm.

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.

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