GBP/USD Forex Signal - 21 August 2019

GBPUSD: Messy and unpredictable on Brexit renegotiation attempt

Yesterday’s signals were not triggered, as there was no appropriate price action when either of the key levels were reached yesterday.

Today’s GBP/USD Signals

Risk 0.75% per trade.

Trades must be taken before 5pm London time today only.

Long Trade Ideas

  • Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of 1.2105 or 1.2065.
  • Place 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.
  • Take off 50% of the position as profit when the price reaches 25 pips in profit and leave the remainder of the position to ride.

Short Trade Idea

  • Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.2210.
  • 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.
  • Take off 50% of the position as profit when the price reaches 20 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 while we had a more bearish outlook, the price was really caught between bulls and bears without a very clear direction. I wanted to stand aside from this pair for another day and see how things develop. This was a fairly good call as the price did not respond right anywhere and would have been very hard to trade yesterday.

The action still looks confused and quite evenly caught between bulls and bears. This is not a great surprise as we are approaching a moment where the new U.K. government is pushing the E.U. to modify their offered deal on Brexit, which they may do now they feel that the U.K. is truly prepared to leave the E.U. at the end of October without a deal. The outcome of this will be the main driver of the price of this pair over the coming weeks.

Perhaps the interesting side would be long here if a deal is reached, from long-term buying in the 1.2000 area if 1.2000 remains intact.

I have no directional bias today on this currency pair.

gbpusd

There is nothing of high importance due today concerning the GBP. Regarding the USD, there will be a release of FOMC Meeting Minutes at 7pm London time.

Adam Lemon

Adam Lemon began his role at DailyForex in 2013 when he was brought in as an in-house Chief Analyst. Adam trades Forex, stocks and other instruments in his own account. Adam believes that it is very possible for retail traders/investors to secure a positive return over time provided they limit their risks, follow trends, and persevere through short-term losing streaks – provided only reputable brokerages are used. He has previously worked within financial markets over a 12-year period, including 6 years with Merrill Lynch.