GBP/USD: Breakout from triangle formation
Yesterday’s signals produced a nicely profitable long trade entry from 1.3037. The price action still looks bullish, so it is probably a good idea to keep all or part of any long trade open.
Today’s GBP/USD Signals
Risk 0.75% per trade.
Trades must be taken between 8am and 5pm London time today.
Short Trade Idea
Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.3194.
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 1.3119 or 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.
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 technical picture has become more bullish with new support at 1.3036 as a buying level. However, although I said I preferred a long trade from 1.3037 to any short trade, I was also cautious about trading long before the price broke above 1.3100.
I was on the right track and it was at least a fairly good call.
The bullishness on the British Pound stands out in a risk-off environment where the USD is generally at least the second-strongest currency. The price action also looks bullish, suggesting we will get still higher prices today.
If the support at 1.3119 or at least 1.3094 hold today, the price should rise by the New York close, so I would take a bullish bias if these support levels can remain strong.
Much of the bullish move in GBP is due to breakout momentum but also there is increasing business optimism in the U.K.
There is nothing of high importance due today concerning either the GBP or the USD.