Yesterday’s signals produced a profitable short trade following the double inside bar breakdown from the resistance level at 1.3122.
Today’s GBP/USD Signals
Risk 0.75% per trade.
Trades may be taken between 8am and 5pm London time today only.
Long Trade
- Long entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of 1.2959.
- 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
- Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.3122.
- 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 yesterday that there is a lot of volatility here, you can try to trade the swings, but the price will be very vulnerable this week to political developments as we approach Friday’s Brexit deadline. When an extension is formally agreed, expect the price to rise, and it will probably remain supported at or a little below 1.3000.
We still have the same situation, with the price essentially consolidating. There is technically downwards pressure, which is interesting, but I think if a long-term extension is announced before this weekend’s current Brexit deadline, the price will rise by at least a hundred pips or maybe two hundred.
Concerning the GBP there will be releases of GDP and Manufacturing Production data at 8:30am London time. Regarding the USD, there will be a release of CPI data at 12:30pm, and FOMC Meeting Minutes at 6pm.