Yesterday’s signals were not triggered, as the bearish price action took place a little way above the resistance level identified at 1.3162.
Today’s GBP/USD Signals
Risk 0.75% per trade.
Trades must be entered 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 1.3162.
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 1.3085 or 1.3029.
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 it looks like being likely to be a bullish environment, but momentum may be slowing, and there are two resistance levels close by overhead. If the price broke strongly above 1.3162 it would have no resistance to stop it running much further, so this would be a very bullish sign.
The price did break above the resistance at 1.3162, but not strongly, so my bullish bias was not triggered. It could have been interpreted as such which would have led to a losing long trade.
Much is now likely to depend upon how the market reacts to the FOMC release due later. I still see the 1.3162 area as important – a sustained break above yesterday’s highs would be a bullish sign, especially after the FOMC release. Yet I see the momentum as slow now, and I think this area is likely to be very resistant.
There is nothing important due today concerning the GBP. Regarding the USD, there will be a release of the FOMC Statement and Federal Funds Rate at 7pm London time.