GBPUSD: Bearish on harder Brexit prospects
Yesterday’s signals were not triggered, as there was insufficiently bearish price action at 1.2648.
Today’s GBP/USD Signals
Risk 0.75% per trade.
Trades must be taken before 5pm London time today only.
Short Trade
Go short following a strong bearish breakout below 1.2600.
Place 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 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 the break below the former support at 1.2648 was a bearish sign. We were also close to long-term low prices and the odds seemed to be strengthening on the hardest of the Brexit candidates, Boris Johnson, becoming the next Prime Minister within the next few weeks. I took a bearish bias on this currency pair until 1.2600 was reached, or until the price closed above 1.2650 for a couple of hours consecutively. I was right to be bearish, but we did get two hours of closing above 1.2650 so that call would have produced a small loss.
The picture is still bearish, but it is starting to look as if the EUR/USD currency pair is looking more bearish than this one, so bears may prefer to trade that pair short instead of this one. Another thing which is problematic here is the total lack of any key support or resistance levels nearby and somewhat choppy price action, which can make picking entries difficult.
I am weakly bearish, but I am not making any precise call today. Much is likely to depend on the U.S. GDP data due later.
There is nothing important due today concerning the GBP. Regarding the USD, there will be a release of Preliminary GDP data at 1:30pm London time.