Yesterday’s signals were not triggered, as there was no sufficiently bullish price action at 1.2616.
Today’s GBP/USD Signals
Risk 0.75% per trade.
Trades must be entered between 8am and 5pm London time today.
Short Trades
Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.2616 or 1.2673.
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
Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of 1.2429.
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 yesterday that Pound remained volatile, and very vulnerable to sharp movement on any unpredictable political events. However, I thought it would generally continue to decline, and fall to new lows when the government loses the Parliamentary vote tomorrow. I was correct to be broadly bearish as “accidents happen along the line of least resistance”. The British Government pulled out of trying to ratify its Brexit deal which sent the Pound plunging heavily, and this pair made a new 18-month low. There has been a recovery, and the price may well stabilize now, but there is still potential for further downwards movement. There may be support at the round number of 1.2500 before the support level I identified at 1.2429. I would take a bearish bias if there are strong reversals following a retracement to either of the resistance levels marked above the current price in the chart below.
Concerning the GBP, there will be a release of Average Earnings Index data at 9:30am London time. Regarding the USD, there will be a release of PPI data at 1:30pm.