GBP/USD: Pivotal point at 1.2450
Yesterday’s signals were not triggered as there was neither bullish price action at 1.2436 nor bearish price action at 1.2504.
Today’s GBP/USD Signals
Risk 0.75% per trade.
Trades may only be taken before 5 pm 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 1.2450.
- 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.
- Remove 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
- Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of 1.2285.
- 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.
- Remove 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 the recent bullishness was not convincing, and the short-term price action suggested that the price would break back below 1.2500.
I was ready to take a bearish bias if we had gotten two consecutive hourly closes below the support level at 1.2436.
This was a good call as the price did get back below 1.2500 and continues to fall, although the price did not get below 1.2436 during yesterday’s session.
The technical picture is considerably more bearish, and the British Pound is standing out right now as a relatively weak currency.
The price is back within a new bearish descending price channel. The chart is dominated by a pivotal resistance level at 1.2450.
A short trade from a bearish reversal at 1.2450 is the only potential trade opportunity I am interested in here, and I would be quite confident this trade will have a good chance of being profitable.
There is nothing of high importance scheduled today regarding either the GBP or the USD.