Yesterday’s signals were not triggered, as the bearish price action took place a little way above 1.3152.
Today’s GBP/USD Signals
Risk 0.75% per trade.
Trades may only be entered before 5pm London time today.
Long Trades
Long entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of 1.3113 or 1.3082.
Place 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.
Short Trade
Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.3158.
Place 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 the picture was looking bearish, due to the heaviness on the support at 1.3083 and the intact bearish trend line below that, but I wanted to see the price break lower during the first hour of the London session before being prepared to really take a bearish bias. It was good that I was cautious as the support level held and the price rose over the course of the day, breaking and invalidating that bearish trend line. In fact, the British Pound was the strongest gainer of any major currency, although to be fair it was a very quiet day generally in the Forex market so that does not mean as much as it usually would.
The price is still looking bullish, but it still being held by the resistance at 1.3158. This is likely to be the pivotal level today. If the early London session sees a solid break above that, there is plenty of room to rise, so it should be a good up day. Alternatively, if the level continues to hold, the price will fall. There is probably going to be more scope for movement to the upside than to the downside.
There is nothing important due today concerning the GBP. Regarding the USD, there will be a release of Crude Oil Inventories data at 3:30pm London time.