GBPUSD: Strong support likely at 1.2822
Last Thursday’s signals were not triggered, as there was no bearish price action at 1.2923 or 1.2943.
Today’s GBP/USD Signals
Risk 0.75% per trade.
Trades may only be taken before 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 1.2822, 1.2799, or 1.2767.
⦁ 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 1.2864 or 1.2888.
⦁ 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 last Thursday that despite the bullishness prevailing, the problem for bulls was that we had an area of long-term resistance just ahead, starting at 1.2932, which was going to very difficult to break until the election result, or possibly just a few days before the election result. I thought it seemed likely that the price would make its high of the next two weeks or so somewhere between 1.2932 and 1.3081.
This was a great call as the price has fallen sharply after peaking that day at 1.2970. The price is now back in its zone of comfort just above 1.2822, which has held as support.
The daily chart suggests a further downwards move is most likely, but I see this level at 1.2822 as likely to be quite strong, so I think it will hold today.
I see the best approach here on a quiet Monday as likely to be taking a long scalp or two at any solid bounce at 1.2822.
There is nothing of high importance due today concerning either the GBP or the USD.