GBP/USD Forex Signal - 16 July 2019

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GBPUSD: More bearish, 1.2500 in sight

Yesterday’s signals could have produced a losing long trade from 1.2550.

Today’s GBP/USD Signals

Risk 0.75% per trade.

Trades may only be entered between 8am and 5pm London time today.

Long Trade Ideas

  • Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of 1.2495 or 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 1.2524, 1.2550, 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.

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GBP/USD Analysis

I wrote yesterday that both the Pound and the U.S. Dollar were relatively weak currencies, meaning this was probably not going to be the right currency pair to trade right now. This was an OK call but in fact the price moved a little more than I had anticipated, breaking support and again threatening the psychologically important big round number at 1.2500. There is a long-term bearish trend, and we are only days away from what will almost certainly be a new British government which will be significantly more prepared to leave the E.U. at the end of October with no deal.

I expect the price to fall further over coming weeks, so I would look for short trades today either below 1.2480 or following a very strong rejection of either of the resistance levels at 1.2524 or 1.2550.GBPUSDRegarding the GBP, there will be a release of Average Earnings Index data at 9:30am London time. Concerning the USD, there will be a release of Retail Sales data at 1:30pm, followed by minor speeches from the Chair of the Federal Reserve at 6pm and FOMC Member Evans at 8:30pm.

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.
Learn more from Adam in his free lessons at FX Academy.