GBPUSD: Still Bearish below 1.2972
Last Tuesday’s signals were not triggered as the price did not reach the resistance level identified at 1.2972 until after 5pm London time.
Today’s GBP/USD Signals
Risk 0.75% per trade.
Trades may only be entered between 1pm and 9pm 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 1.2870 or 1.2822.
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 Idea
Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.2972.
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 Tuesday that there was much more volatility in this currency pair than in any other pair, so it should remain a good choice for day traders.
I thought it would be worthwhile to pay attention to the short-term bearish momentum as long as the price continued to break to new lows. The price did not get below the lows made on Monday, so this was at least enough to keep out of trouble, although movement overall was small.
With the U.K. on holiday today, trading in this pair is likely to again be very light. The technical picture remains bearish below the resistance level at 1.2972 and this level held last Tuesday when it was touched which reinforces my confidence in it a little.
I would take a cautious bearish bias if the price again bearish rejects the resistance at 1.2972.
There is nothing of high importance due today regarding either the GBP or the USD. It is a public holiday in the U.K. today.