Last Thursday’s signals were not triggered, as the bullish price action took place slightly below 1.2816.
Today’s GBP/USD Signals
Risk 0.75% per trade.
Trades may only be entered before 5pm London time today.
Short Trades
Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.2872.
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 Trades
Long entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of 1.2780 or 1.2755.
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 key pivotal level to watch was likely to be 1.2940: if the level was tested and held, the price would probably fall again from there. I also warned to watch out for the Pound following a strong movement in the Euro. In fact, the price never even was able to reach 1.2940, but fell sharply from an area below that when the Euro started to fall after the ECB release.
There is a developing, albeit low-volatility, bearish trend in this pair, and the Pound remains subject to sudden moves in both directions upon rumours concerning the terms of a Brexit deal, or the lack of a deal, so it’s a very political currency right now. Having said that, it does seem to be headed in a bearish direction. We can expect the support level close to 1.2750 to be strong as it is confluent with a major psychological level. I would be bearish upon a strong rejection of 1.2872, if that sets up later.
There is nothing important due today concerning either the GBP or the USD.