GBPUSD: Still Bearish on No Deal Brexit Prospect
Yesterday’s signals were not triggered, as none of the key levels were ever reached.
Today’s GBP/USD Signals
Risk 0.75% per trade.
Trades may only be taken before 5pm London time today.
Long Trade
Go long upon the next touch of 1.2429.
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.
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
Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.2572, 1.2606, or 1.2610.
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.
Remove 50% of the position as profit when the price reaches 20 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 the picture now was bearish, trending down on all time frames as we approached the London open. This suggested we were likely to see lower prices today, especially if the price moves down on relatively high volatility between 8am and 9am London time. This was a good call as the price has continued to fall. A few hours ago, the price reached a level just a few pips above the very big round number at 1.2500. If reached again, that level may be enough to hold up the price. However, the Dollar is strong, and the Pound weak due to poor economic data and the increasing likelihood that Boris Johnson will become the next British Prime Minister and oversee a no deal Brexit in October. There is a long-term bearish trend and every reason to be bearish, but I would prefer to see the price either retrace to resistance or get established below 1.2500 before entering any new short trades. I would not want to take a long trade here today. There is quite likely to be some activity when the results of today’s round of voting in the British Conservative Party leadership contest are released.
There is nothing important due today concerning the USD. Regarding the GBP, the Governor of the Bank of England will be giving a minor speech at 3pm.