GBP/USD Forex Signal

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GBPUSD: Weakly bearish below 1.2858 

 

Yesterday’s signals were not triggered, as neither 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 Idea

⦁ Long entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of 1.2762. 

⦁ Put 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 Ideas

⦁ Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.2859 or 1.2924.

⦁ Put 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 the only potential opportunity I saw here was a short off the resistance at 1.2924. The price never reached that level, but I was correct to be looking to the short side as the price moved down over the day. The technical picture is a little more bearish, with new lower resistance having formed at 1.2858. Additionally, markets are suffering “risk-off” sentiment which has hit the Pound and boosted the USD. Therefore, I would be prepared to take a bearish bias if we get a bearish rejection of 1.2859 or 1.2924 later during today’s London session, BUT I am aware there are major releases due from the Bank of England today which could cause a price spike of a major short-term trend change. For this reason, I would look to fade a spike following the releases to any key level highlighted above.GBPUSDConcerning the GBP, the Bank of England will be releasing its Monetary Policy Report and Summary as well as its Bank Rate Votes at Noon London time, followed half an hour later by the usual press conference. There is nothing of high importance due today regarding 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.