Yesterday’s signals produced a profitable short trade following the bearish pin candlestick rejecting the resistance level at 1.3993. It would probably be wise to take more profit now if not done already.
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 1.3807.
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 1.3938, 1.3993, or 1.4035.
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
The strong U.S. Dollar yesterday saw the price move down from the obvious strong support level just below the psychologically key 1.4000 level, yet it failed to make more than the average daily range and recovered somewhat from its low. It then made a bearish inflection at 1.3938, which was earlier a bullish inflection, so we may have another useful resistance level here. Despite this bearish event, the Pound has held up better than the Euro, and the price here may have made a supportive double bottom at 1.3850, so bears might need to be a little cautious. The EUR/USD looks likely to be a better vehicle to use for benefitting from any continuing strength in the U.S. Dollar. There is also major central bank input due later today from the Bank of England, which could push the price anywhere in the short term, so today’s direction becomes extremely hard to forecast.
There is nothing due today concerning the USD. Regarding the GBP, there will be a release of the Bank of England’s Monetary Policy Summary, Official Bank Rate and Votes, and the Inflation Report at Noon London time.