GBPUSD: Bearish pressure on 1.2500
Yesterday’s signals were not triggered as none of the key levels have been reached yet.
Today’s GBP/USD Signals
Risk 0.75% per trade.
Trades may only be entered between 8am and 5pm London time today.
Long Trade Idea
- Go long following a bullish price action reversal on the H1 time frame immediately 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 Trade Ideas
- Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.2540, 1.2562, or 1.2587.
- 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 odds were in favour of another downwards movement, and if we did not get bearish action over the day it would indicate a medium-term bullish reversal was on the cards, so 1.2500 was very likely to be pivotal for this pair. I was ready to take a bearish bias for at least a while if the price is below 1.2500 at 9am London time today.
The price was not below 1.2500 at that time, but this was a good call as it held as support and acted as the pivotal level, and the price did indeed close down on the day at the end of the day.
The probability is still in favour of lower prices, and there is a strong bearish trend here which is supported by both currencies in the pair, particularly the British Pound. However, if 1.2500 continues to hold, we are likely to see a bullish reversal. This should continue to be the pivotal point, so I would again be ready to take a bearish bias on this currency pair if the price is below 1.2500 at 9am London time on above-average volatility.
There is nothing of high importance due today regarding the GBP. Concerning the USD, the Chair of the Federal Reserve will be making a minor speech at 1:45pm London time.