GBP/USD Forex Signal - 4 December 2019

Adam Lemon

GBPUSD: Bulls threatening breakout above 1.2750 – 1.3000 range

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 on the H1 time frame immediately upon the next touch of 1.2972 or 1.2920.
  • 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 1.3041 or 1.3081.
  • 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 yesterday that the price was close to 1.2950 and was very much challenging the upper end of this range from 1.2750 to about 1.3000. I thought the resistance would hold until after the election on 12th December, therefore I was prepared to take a bearish bias here if we had gotten a firm bearish reversal at or above 1.2950.

This has worked out OK so far as yesterday’s Dollar weakness pushed the price up here to a new multi-month high closing price just below 1.3000. However, in this area, we have just gotten a bearish turn, and there could be 100 or 200 short pips of profit to come from a move down from the top of this range. On the other hand, if the price can get established later above 1.3010 at new highs, that would be a bullish sign.

The price is in a pivotal area, apparently beginning a downwards move, so there should be a trading opportunity here. If the price has 2 consecutive hourly closes below 1.2972 then I would take a bearish bias on this currency pair today.

gbpusd

There is nothing of high importance due today concerning the GBP. Regarding the USD, there will be a release of the ADP Non-Farm Employment Change forecast at 1:15pm London time, followed by ISM Non-Manufacturing PMI data at 3pm.

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.
Learn more from Adam in his free lessons at FX Academy

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