Yesterday’s signals were not triggered, as there was insufficiently bearish price action to trigger a short trade entry at 1.3344. However, 1.3344 and 1.3265 did a great job in defining the high and low of the day as key levels.
Today’s GBP/USD Signals
Risk 0.75% per trade.
Trades must be entered from 8am until 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 1.3377 or 1.3409.
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 1.3338, 1.3308, or 1.3261.
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
Last Thursday I wrote that I had a bearish bias below 1.3265. This worked out OK as at least preventing any bad trades, as the price remained above that level for the entire relevant trading session. I had seen this pair as likely to fall sharply on Friday if there was powerful NFP-related U.S. data, although despite the strong data, this did not happen. The Pound and Euro have continued to rise, and the Pound looks stronger than the Euro, suggesting slightly higher prices are most likely today. The flaw in the bullish scenario is the resistance close by at 1.3377 which has contained the high made so far during the Asian session, at the time of writing. It is likely that the price will remain relatively inactive until the British data release. I would have a bullish bias if the price settles above 1.3377 after that release is made.
Concerning the GBP, there will be a release of Construction PMI data at 9:30am London time. There is nothing due today concerning the USD.