Yesterday’s signals may have produced a profitable long trade following the bullish doji break on a bounce at the support level identified at 1.3824. It might be wise to exit with profit, as the Pound looks relatively weak.
Today’s GBP/USD Signals
Risk 0.75% per trade.
Trades must be taken before 5pm London time today only.
Short Trade
Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.3940.
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.
Long Trades
Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of 1.3872 or 1.3824.
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.
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 was incorrect yesterday to take a cautious bearish bias. I thought that the price was weighing heavily on the support level at 1.3824 with a breakdown looking likely, but the price held and continued to advance, printing a new higher support level at 1.3872. Although this is in line with a long-term bullish trend, I do not feel very bullish here, as the advances in the Pound look weak compared to the Euro and the Yen. For that reason, I just can’t say I have a bullish bias, as I think any recovery in the U.S. Dollar would be likely to send the price of this pair falling more strongly than it is currently rising in a bullish condition.
There is nothing due today concerning the GBP. Regarding the USD, there will be a release of the ADP Non-Farm Employment Change at 1:15pm London time, followed by Crude Oil Inventories at 3:30pm.