GBPUSD: Bearish below 1.2092
Yesterday’s signals were not triggered, as none of the key levels were reached.
Today’s GBP/USD Signals
Risk 0.75% per trade.
Trades must be taken between 8am and 5pm London time today only.
Long Trade Ideas
Go long following a bullish price action reversal upon the next touch of 1.2092 or 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 1.2280.
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 it looked like the support level at 1.2092 was going to hold over the day, but I didn’t see the price as likely to rise much, so there was probably not going to be much opportunity in this currency pair over the day except maybe a small long scalp off 1.2092.
This was a good call and my probable scenario was exactly what happened – the price moved little but held above the support at 1.2092.
As such, we have no significant change to the technical picture. The higher time frames are looking more bearish, but this support holds firm.
I would keep looking towards the short side, as the U.K. heads towards a more probable and likely harder Brexit at the end of October, so although it probably won’t happen today, I see a break below 1.2092 as opening the door to a sharp fall to the major psychological level and huge round number at 1.2000.
I would take a bearish bias if the price is below 1.2085 and 9am or 10am London time today.
There is nothing of high importance due today concerning either the GBP or the USD.