GBP/USD Forex Signal - 14 August 2019

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GBPUSD: Still bearish below 1.2106

Yesterday’s signals were not triggered, as none of the key levels were reached yet.

Today’s GBP/USD Signals

Risk 0.75% per trade.

Trades must be taken between 8am and 5pm London time today only.

Long Trade Idea

  • Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of 1.2000.

  • 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 1.2106.

  • 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.

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GBP/USD Analysis

I wrote yesterday that as the price sold off from the 1.2100 area again, we were likely to see another move down towards 1.2000 over the day. I thought that the best way to trade this pair would probably be to look for longs near 1.2000 and shorts near 1.2100 and to not stay in the trade too long.

This was a good call as yesterday’s high was just 2 pips below 1.2100.

Yesterday’s improvement in risk sentiment saw some currencies make sharp reversals and strong movements. This pair behaved very differently – it is still exhibiting the same steady bearish trend. The British Pound is one of the weakest major currencies and now the Dollar is stronger, we could be set for a break below 1.2000. The problem for bears is that this is a big psychological level and may be defended by institutions protecting options. Once 1.2000 breaks down though, we can expect a sharp fall lower.

I would take a bearish bias on this currency pair if there is a retracement to 1.2106 and a firm bearish reversal there.GBPUSDRegarding the GBP, there will be a release of U.K. CPI (inflation) data at 9:30am London time. There is nothing of high importance due concerning the USD.

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.