GBPUSD: Bearish below 1.2961
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 may only be entered between 8am and 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 1.2870 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 Ideas
Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.3015 or 1.3090.
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 if the price can make a couple of consecutive hourly closes below 1.2995, I would take a bearish bias on this pair. I noted that there was plenty of room for the price to fall without hitting any support as there were no key support levels until 1.2870.
This was a good call as the price continued to move broadly lower after making those consecutive lower closes and is now about 10 pips below the level from which I made the short call.
The action continues to look bearish and resistance levels are holding without even being touched. The Pound is notably more bearish than the Euro and that is significant. It is probably due to the market’s perception over the terms on which the UK will leave the EU just over two weeks from now.
The price looks likely to fall further and the thing to watch out for is two consecutive hourly closes below the swing low at 1.2961. I would take a bearish bias here again if that happens during the first half of the London session. It may be that the U.S. inflation data which will be released later causes unexpected price movement so anyone with an open trade in a USD pair should watch out for that later as we get towards the New York open.
There is nothing of high importance due today regarding the GBP. Concerning the USD, there will be a release of CPI data at 1:30pm London time.