Last Thursday’s signals were not triggered, as unfortunately the support level at 1.3019 was not rejected until after the end of the London session.
Today’s GBP/USD Signals
Risk 0.75% per trade.
Trades must be entered before 5pm London time today.
Long Trade
Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of 1.3019.
Put 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.
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.
Short Trade
Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.3249.
Put 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.
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 last Thursday that a sustained break below 1.3150 would be a bearish sign, so I would take a bearish bias if there were two consecutive hourly closes below 1.3150 during the London session today. This was a good call as after these closes happened, the price fell by approximately another 120 pips, before finding strong support and making a complete turnaround just above the key psychological level and major round number at 1.3000. The price was able to recover to reach an area close to the resistance at 1.3250 but now seems to be turning bearish again.
Brexit is the key driver, as usual, with this week looking to be truly crucial in determining whether the U.K. leaves the E.U. and if so upon what terms, although the real action will be later in the week.
It seems that the odds of a “No Deal” Brexit are looking stronger, which has weakened the Pound, so short trades (at least above 1.3000) are probably going to be more successful than long trades, in the current environment.
There is nothing of high importance due today concerning either the GBP or the USD.