GBP/USD: Consolidating triangle formation
Yesterday’s signals were not triggered as there was no bearish price action when the price reached 1.3036.
Today’s GBP/USD Signals
Risk 0.75% per trade.
Trades must be taken prior to 5pm London time today only.
Short Trade Idea
Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.3094.
Place 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.
Long Trade Ideas
Long entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.3037 or 1.3022.
Place 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.
GBP/USD Analysis
I wrote yesterday that while it was OK to be cautiously bearish right now, or to take a short trade from 1.3036, there would be a much greater chance of a strong fall in the price once it could get established below 1.2950.
This was a good call as it enough to stay out of trouble, as there was a bullish surprise with the price never getting below 1.2950.
The technical picture is now more bullish as we have an ascending bullish trend line plus the price action has flipped the key resistance level at 1.3036 to new higher support which is very clearly acting as a buying level. However, we still have a strong medium-term bearish trend line. Overall, my earlier analysis that the price is uncertain between 1.2950 and 1.3100 is holding up well and remains a good guide to trading this pair.
I would take either a long or short trade here today from any key level identified above but be very careful about taking profits. I slightly prefer a long trade from 1.3037 to any short trade.
There is nothing of high importance due today concerning either the GBP or the USD.