GBP/USD: Significant recovery by Pound
Yesterday’s signals were not triggered, as there was no bullish price action when the support level at 1.1881 was reached.
Today’s GBP/USD Signals
Risk 0.75% per trade.
Trades may only be entered between 8am and 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 1.1997 or 1.2139.
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 1.1695.
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 prepared to take a short-term long trade from a bullish bounce at 1.1881 or a medium-term short trade from a bearish reversal at 1.2000. Neither set up occurred but the area near 1.2000 is looking more and more like it is going to hold as strong resistance. I would under normal conditions be prepared to take a short trade from a bearish reversal at 1.2000 but we will get the British central bank’s policy release shortly as well as U.S. unemployment data, both of which could push the price around.
Despite the news items, I think that it is likely that the resistance at 1.2000 will hold even if it is briefly exceeded by the price action.
Concerning the GBP, the Bank of England will be releasing its Monetary Policy Summary, Official Bank Rate and Votes at Noon London time. Regarding the USD, there will be a release of Unemployment Claims data at 12:30pm.