GBP/USD: Breakout above medium-term resistance at 1.2515?
Last Thursday’s signals were not triggered, as none of the key levels were reached that day.
Today’s GBP/USD Signals
Risk 0.75% per trade.
Trades must be entered before 5pm London time today only.
Short Trade Idea
Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.2624.
Place the stop loss 1 pip above the local swing high.
Adjust the stop loss to break even once the trade is 25 pips in profit.
Remove 50% of the position as profit when the price reaches 25 pips in profit and leave the remainder of the position to ride.
Long Trade Ideas
Long entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of 1.2443 or 1.2411.
Place the stop loss 1 pip below the local swing low.
Adjust the stop loss to break even once the trade is 25 pips in profit.
Remove 50% of the position as profit when the price reaches 25 pips in profit and leave the remainder of the position to ride.
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 Thursday that the dominant consolidation pattern between 1.2200 and 1.2500 was likely to persist over the day, and a spike to either extreme would present a good trade opportunity to fade such a spike. This was a good call as the price did remain within that consolidation zone over the day and move by a small fluctuation only.
The price has gone on to rise in line with its medium-term trend and within the past few hours it has broken temporarily above the key resistance level at 1.2515 to a new 2-week high price. Although this bullish move may be short-lived, it seems to signify that the bulls have the upper hand for now, so I would be happy to take a long trade today at a bounce at any support level which is reached. Such a trade would be better taken after the New York open as the U.K. is on holiday today so trading in London is likely to be a little thin.
There is nothing of high importance due today concerning either the GBP or the USD. It is a public holiday today in the U.K.