Yesterday’s signals produced a losing long trade from the bullish outside candlestick on the hourly chart which rejected the support level at 1.2894.
Today’s GBP/USD Signals
Risk 0.75% per trade.
Trades must be taken between 8am and 5pm London time today only.
Short Trades
Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.2940 or 1.3042.
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 Trades
Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of 1.2816 or 1.2780.
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 this pair was showing the clearest direction of all the major Forex currency pairs: downwards. I was bearish below 1.2950 to at least 1.2900. This was a good call as the price did fall to 1.2900 once it broke below 1.2950, giving a false bullish bounce at the former support of 1.2894 before breaking below that too.
The action looks clearly bearish over the medium-term, but as we approach the London open there seems to be some buying, so we might well see a bullish pull back today. The key pivotal level to watch is likely to be 1.2940: if the level is tested and holds, the price will probably fall again from there. I would not be so optimistic about taking a long above 1.2940, although a break above that level may signify a further price rise. Watch out for the ECB release due later as strong movements in the Euro can drag the British Pound along with it.
There is nothing important due today concerning the GBP. Regarding the USD, there will be a release of Core Durable Goods Orders data at 1:30pm London time.