Table of Contents
Affiliate Disclosure
Affiliate Disclosure DailyForex.com adheres to strict guidelines to preserve editorial integrity to help you make decisions with confidence. Some of the reviews and content we feature on this site are supported by affiliate partnerships from which this website may receive money. This may impact how, where and which companies / services we review and write about. Our team of experts work to continually re-evaluate the reviews and information we provide on all the top Forex / CFD brokerages featured here. Our research focuses heavily on the broker’s custody of client deposits and the breadth of its client offering. Safety is evaluated by quality and length of the broker's track record, plus the scope of regulatory standing. Major factors in determining the quality of a broker’s offer include the cost of trading, the range of instruments available to trade, and general ease of use regarding execution and market information.

GBP/USD Forex Signal: Bearish Consolidation - 24 March 2020

GBP/USD: New 35-year low price last week

Yesterday’s signals were not triggered, as none of the key levels were reached during the London session.

Today’s GBP/USD Signals

Risk 0.75% per trade.

Trades may only be entered before 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 1.1710 or 1.1881 or 1.1997.

  • 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 Idea

  • Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of 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 we were seeing the final leg of a bearish head and shoulders pattern seeming to form from the nearest resistance level at 1.1710. I thought that the price was likely to fall for some hours but was also still likely to find support over the short term at 1.1500 or maybe below 1.1500. This was a good call as the price did fall to approximately 1.1450 before recovering. It is now moving up and looking likely to test the key resistance level at 1.1710 again at some time later today.

Technically, we see a wide bearish consolidation between the 35-year low at about 1.1400 which was reached last week, and the key resistance level at 1.1710, or maybe 1.1881. The Pound is finding some kind of floor after falling sharply as concerns mounted that the U.K. is on course for an Italian-style coronavirus outcome. Last night, the British Government put the force of law behind emergency lockdown measures. The USD is also selling off a little, which has helped the stabilization.

I think the medium to long-term outlook remains bearish, as it seems far from certain that the measures the U.K. has ordered to try to stop the spread of the coronavirus will be enforceable or strongly effective, as pictures of crowded trains in London this morning seemed to confirm. However, I would want to see the price break to new lows below 1.1400 before being strongly bearish, although speculative short trades from reversals at 1.1710 or (especially) 1.1881 also look attractive. I would not want to take any long trades today although the short-term price action does look relatively bullish.

GBPUSD

Concerning the GBP, there will be a release of Flash Services & Manufacturing PMI data at 9:30am London time. Regarding the USD, there will be a release of Flash Manufacturing PMI data at 1:45pm.

Adam Lemon
About Adam Lemon

Adam Lemon began his role at DailyForex in 2013 when he was brought in as an in-house Chief Analyst. Adam trades Forex, stocks and other instruments in his own account. Adam believes that it is very possible for retail traders/investors to secure a positive return over time provided they limit their risks, follow trends, and persevere through short-term losing streaks – provided only reputable brokerages are used. He has previously worked within financial markets over a 12-year period, including 6 years with Merrill Lynch.

 

Most Visited Forex Broker Reviews