Yesterday’s signals were not triggered as none of the key levels were reached.
Today’s GBP/USD Signals
Risk 0.75% per trade.
Trades may only be taken prior to 5pm London time today.
Short Trade Idea
- Go short following a bearish price action reversal on the 1H1 time frame H1H1H1 time frame immediately upon the next touch of 1.2515.
- 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 25 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 1H1 time frame H1H1H1 time frame immediately upon the next touch of 1.2252.
- 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 25 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 thought it was likely that the price would fall to hit 1.2252 and then the reaction there would be pivotal in determining what happened over the rest of the day. In fact, the price moved little and never reached that level.
The price chart below shows that in this pair we are basically seeing a bullish consolidation over the past two weeks, between about 1.2200 and 1.2500. This should be seen as bullish as the dominant wave before the consolidation was upwards.
I think this consolidation pattern is likely to persist until tomorrow, but the European Central Bank’s policy input today may push the Pound around so we should probably expect some volatility in the price. This item could cause a spike down to 1.2252 or up to 1.2515, either of which could give a great opportunity to scalp or trade such a reversal on a short time frame such as the 5-minute chart. I think a long trade from 1.2252 would be likely to have the most potential if it sets up.
Regarding the USD, there will be a release of Unemployment Claims at 1:30pm London time. There is nothing of high importance due today concerning the GBP.