GBP/USD: Price approaching 2-month lows
Last Thursday’s signals were not triggered as none of the key levels were reached during the London session hours.
Today’s GBP/USD Signals
Risk 0.75% per trade.
Trades must be entered between 8am and 5pm London time today only.
Short Trade Ideas
Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.2139 or 1.2245.
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 Idea
Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of 1.1976.
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 as the price was making a new 1-month low and was in a firm downwards trend over the medium term, I took a bearish bias below 1.2250. This was a great call as the price remained below that level and despite going sideways on Thursday, it moved down strongly the next day to approach a new 2-month low price.
The British Pound is clearly the weakest major currency and the technical picture will remain undoubtedly bearish here as long as the price holds below the nearest resistance level at 1.2139.
The price has room to fall further but may find some support if and when it approaches the big round number at 1.2000.
I will take a bearish bias today if the price retraces to 1.2139 and makes a bearish price action reversal there.
There is nothing of high importance due today concerning either the GBP or the USD.