GBP/USD Forex Signal - 1 May 2019

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Yesterday’s signals were not triggered, as there was no bearish price action at 1.2963 or 1.3005.

Today’s GBP/USD Signals

Risk 0.75% per trade.

Trades may only be entered before 5pm London time today.

Long Trades

  • Long entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of at the next touch of 1.3005 or 1.2963.
  • 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.
  • Remove 50% of the position as profit when the price reaches 25 pips in profit and leave the remainder of the position to run.

Short Trades

  • Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.3073.
  • 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.
  • 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.

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GBP/USD Analysis

I wrote yesterday that if the short-term downwards movement persisted over the first hour of the London session on at least slightly above-average volatility, I would take a cautious bearish bias. It did not, so my call was at least enough to stay out of trouble, as the Pound made a strong rise later in the day, advancing more strongly against a broadly weak U.S. Dollar than any other currency did. This currency pair is now trading above 1.3000 which is psychologically significant, and the picture is more bullish now for these reasons.

The short-term movement suggests we are likely to see a bearish retracement as London opens, so a test from above of the 1.3000 area is quite likely. A bullish bounce there would provide a nice long trade entry if the volatility is healthy when it happens, so if that played out, I would take a short-term bullish bias.

Be aware there is no real long-term trend here.

gbpusd

There is nothing important due today concerning the GBP. Regarding the USD, there will be a release of ISM Manufacturing PMI data at 3pm London time, followed by the FOMC Statement and Federal Funds Rate at 7pm and the press conference half an hour later.

Adam is a Forex trader who has worked within financial markets for over 12 years, including 6 years with Merrill Lynch. He is certified in Fund Management and Investment Management by the U.K. Chartered Institute for Securities & Investment.