Yesterday’s signals may have produced an excellent short trade entry from the bearish inside candlestick which rejected the resistance level at 1.3082. The Pound looks very bearish so if there is any left, it could be worth holding on to at least part of this short trade.
Today’s GBP/USD Signals
Risk 0.75% per trade.
Trades must be taken between 8am and 5pm London time today only.
Short Trade
- Go short following a bearish price action reversal on the 1H1 time frame H1H1H1 time frame immediately upon the next touch of 1.3006.
- 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.
Long Trade
- Go long following a bullish price action reversal on the 1H1 time frame H1H1H1 time frame immediately upon the next touch of 1.2894.
- Put the stop loss 1 pip below the local swing low.
- 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 saw early signs of a break above the resistance level at 1.3082, which suggested a further bullish movement today to slightly higher prices. I was completely wrong as the price failed to rise significantly higher there and in fact the level was pivotal, sending the price strongly lower over the day. There is still no real long-term trend, but as I said, the pair remains weak on bad British political news over Brexit, where it seems less likely that the British government will be able to conclude an exit deal with the European Union.
I have no directional bias today, although I do think the nearest support and resistance levels are likely to hold.
There is nothing important due today concerning the USD. Regarding the GBP, the Governor of the Bank of England will be making a minor speech at 4:20pm London time.