Last Thursday’s signals were not triggered, as there was insufficiently bullish price action at 1.3888.
Today’s GBP/USD Signals
Risk 0.75% per trade.
Trades must be entered before 5pm London time today only, during the next 24-hour period.
Short Trades
Go short 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
Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of 1.3338 or 1.3300.
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 had a bullish bias last Thursday, but although the price did rise a little after falling, it ended the day down. The British Pound is in a similar technical position to the EUR/USD, but the EUR is significantly stronger leading this pair to look weaker and more likely to get back into its long-term bearish trend. However, the price looks as if it will need to “cool off” and slowly descend for a while before it can really start falling again. It probably will need to break below the support at 1.3338 or even 1.3300 before it can look properly bearish again. However, if the U.S. Dollar does strengthen later in the week, it does look likely to make an impact here.
It is always dangerous to pick levels, but I could see a top here at or very close to the big psychological level at 1.3500 – that would be a risky play, but a small reversal there could give a good reward to risk ratio on the short side.
Meanwhile, the price is right in the middle of a wide consolidation zone, looking equally likely to move up or down over the short term, so I have no directional bias today.
There is nothing due today concerning the USD. Regarding the GBP, there will be a release of Manufacturing Production data at 9:30am London time.