GBP/USD Forex Signal - 6 February 2018

Yesterday’s signals were not triggered, as the bullish price action took place slightly below the support level identified at 1.4092.

Today’s GBP/USD Signals

Risk 0.75% per trade.

Trades must be entered before 5pm London time today only.

Long Trade

  • Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of 1.3917.

  • 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.

Short Trades

  • Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.4035 or 1.4090.

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

  • 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.

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

I wrote yesterday that the overall outlook had become 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. The price did indeed move down and get established below the psychologically important number at 1.4000 after initially bouncing a few pips below 1.4092. The Pound is clearly weaker than the Euro, and despite the long-term bullish trend, it is hard to be bullish if the price is below 1.4090 let alone below 1.4000. The next movement seems hard to forecast, we may just see a bottoming-out consolidation above the next support level at 1.3917.GBPUSD

There is nothing due today concerning either the GBP or the USD.

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.