GBP/USD: Bulls so far unable to break big round number at 1.2500
Last Tuesday’s signals were not triggered, as none of the key levels were hit that day.
Today’s GBP/USD Signals
Risk 0.75% per trade.
Trades may only be entered prior to 5pm London time today.
Short Trade Idea
- Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.2571.
- 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 Ideas
- Long entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of 1.2396 or 1.2378.
- 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 last Tuesday that I think that the day would be an up day. I was seeking to take a long trade following a bullish bounce at 1.2400 later or two consecutive hourly closes above 1.2450. This was an OK call as the break above 1.2450 gave about another 50 pips of profit over the following hours before the price fell back and pushed down the nearest support level a few pips lower than 1.2400, to about 1.2396.
The technical picture is still bullish as we have this supportive area starting near the round number at 1.2400 continuing to hold up, but it can also be seen that bulls are finding it impossible to hold the price up above the even bigger round number at 1.2500. Nevertheless, it still looks as if the price is more likely to rise than fall, so I would continue to look for long trades at bullish bounces at any key support level nearby.
Today’s action may be somewhat hard to predict as the ECB’s monthly policy release might push the Pound around as well as the Euro.
Regarding the USD, there will be a release of Unemployment Claims data at 1:30pm London time. There is nothing of high importance due today concerning the GBP.