GBP/USD: New 35-year low price
Yesterday’s signals were not triggered as there was no bullish price action at either 1.1905 or 1.1800.
Today’s GBP/USD Signals
Risk 0.75% per trade.
Trades must be taken prior to 5pm London time today.
Short Trade Ideas
Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.1656 or 1.1881.
Put 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 run.
Long Trade Ideas
Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of 1.1448 or 1.1400.
Put 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.
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.
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 was ready to follow the powerful bearish momentum if the price broke to new lows later below 1.1985, so I took a bearish bias following an hourly close below that level, until at least 1.1905.
This was a great call, good for the day of almost 500 pips of profit. I don’t think there has been a better daily call than this in the history of Forex trading, unless you were buying an option on the Swiss Franc just before the SNB crash in 2015.
The price fell spectacularly yesterday to a new 35-year low. The major reasons are the increasing sense that the British government’s U-turn on its coronavirus strategy marks a failure which will lead to a worsening health situation, as new cases and deaths begin to increase exponentially and dramatically; and the fact that this situation will make Britain’s disengagement from the European Union more costly and difficult too.
The price may now find a bottom, at least for a while, as is common after extremely strong and sudden directional moves such as we saw yesterday. It is also true that the USD is retracing after making strong gains yesterday. However, I remain bearish overall, if we get a bounce at resistance or if we see an hourly close below yesterday’s low price.
There is nothing of high importance scheduled today regarding either the GBP or the USD.