Yesterday’s signals produced a nicely profitable short trade from the bearish reversal on the engulfing hourly candle rejecting the resistance level at 1.3350. It would probably be wise to close out any remaining profit.
Today’s GBP/USD Signals
Risk 0.75% per trade.
Trades must be entered between 8am and 5pm London time today.
Short Trade
Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.3350.
Put 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
I wrote yesterday that I had a bullish bias, but the Pound would be vulnerable to political shocks, and it is possible that there may be a rebellion within the governing Conservative Party which would overthrow the government and lead to a new Prime Minister or even a General Election. This was a timely warning, as resignation by a key minister and a possible leadership challenge suddenly emerged yesterday and sent the price down strongly after it had struggled to rise above the resistance level at 1.3350. However, it has become apparent that an immediate challenge to the Prime Minister looks unlikely, so the price has stabilized, and it s a long way from either support or resistance. The price will now probably consolidate in the absence of any further political shocks, meaning that there is not likely to be a good trading opportunity here today. I have no directional bias.
There is nothing important due today regarding the USD. Concerning the GBP, there will be a release of GDP and Manufacturing Production data at 9:30am London time.