Last Thursday’s signals were not triggered, as there was no bearish price action when the price reached 1.3217.
Today’s GBP/USD Signals
Risk 0.75% per trade.
Trades may only be entered before 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 1.3217.
Place 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 Trade
Long entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of 1.3030.
Place 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 last Thursday that the price now looked very unattractive, with a narrow consolidation within a very wide area between the nearest key support or resistance levels. However, the action suggested that a bullish rise was likely to be stronger than any fall that day. This turned out to be a good call, as the price did rise strongly and break well above the resistance level I had identified at 1.3217. This was due to talks between the U.K. and E.U. on Brexit, which initially generated some optimism on a deal being reached, before that fell apart the next day which sent the Pound back down again quite sharply.
There is no change to the technical picture, and this pair is all about the British Pound, whose relative value is now all about whether a Brexit deal will be reached. As such technical analysis is of little use with political events the main driver of the price. As such, I would be extremely careful about trading this pair, and I certainly have no directional bias. We also see an absence of clear technical indicators.
There is nothing important due today concerning the GBP. Regarding the USD, there will be a release of CB Consumer Confidence data at 3pm London time.