GBP/USD: Can bulls defend 1.2953?
Yesterday’s signals were not triggered as the price action rejecting the resistance level at 1.3016 was insufficiently strong to trigger a short trade entry. However, this level very accurately capped the high of the day to the pip.
Today’s GBP/USD Signals
Risk 0.75% per trade.
Trades must be taken between 8am and 5pm London time today only.
Short Trade Ideas
Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.3016, 1.3080, or 1.3101.
Place 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.
Take off 50% of the position as profit when the price reaches 20 pips in profit and leave the remainder of the position to run.
Long Trade Ideas
Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of 1.2953 or 1.2886.
Place the stop loss 1 pip below the local swing low.
Move 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 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 I would take a bullish bias if we had gotten two consecutive hourly closes above 1.3016, or a bearish bias if we had gotten a convincing failure to break above the resistance level at 1.2980.
I was half right – the level at 1.3016 held to the pip, and although we have seen a bullish development with the invalidation of the upper trend line of yesterday’s consolidating price triangle formation, the price has been falling steadily from that resistance level.
The key thing to watch for now is whether the bulls can keep the price up from the 1.2950 area. Even below that, we might see support later at about 1.2925.
I would be prepared to take a long bias if we get a firm bounce off 1.2953 during the first half of today’s London session.
There is nothing of high importance due today regarding either the GBP or the USD.