GBP/USD Forex Signal - 23 May 2018

Yesterday’s signals were not triggered, as there was no bearish price action at 1.3456.

Today’s GBP/USD Signals

Risk 0.75% per trade.

Trades must be entered between 8am and 5pm London time today only.

Short Trades

  • Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.3482 or 1.3521.

  • 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

  • Long entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of 1.3400 or 1.3348.

  • 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 wrote yesterday that as the British Pound was looking very weak, I was comfortable taking a bearish bias below 1.3400. The price never broke below 1.3400, instead popping up above the nearest resistance level in a classic stop run movement, before falling back down again to resume its test of the support at 1.3400. The price looks quite weak, so I am again anticipating a break below 1.3400, and would be bearish below that level, as the long-term charts strongly point towards further downwards movement over the short-term. Note that this pair is more bearish than EUR/USD.GBPUSD

Concerning the GBP, there will be a release of CPI data at 9:30am London time. Regarding the USD, there will be a release of Crude Oil Inventories at 3:30pm, followed by the FOMC Meeting Minutes at 7pm.

Adam Lemon

Adam Lemon began his role at DailyForex in 2013 when he was brought in as an in-house Chief Analyst. Adam trades Forex, stocks and other instruments in his own account. Adam believes that it is very possible for retail traders/investors to secure a positive return over time provided they limit their risks, follow trends, and persevere through short-term losing streaks – provided only reputable brokerages are used. He has previously worked within financial markets over a 12-year period, including 6 years with Merrill Lynch.