GBP/USD Forex Signal: Bearish Price Channel

Adam Lemon

The technical picture is considerably more bearish, and the British Pound is standing out right now as a relatively weak currency.

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.

Advertisement
Take advantage of record-breaking volatility in the British Pound
Trade GBP/USD now!

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.

GBP/USD

There is nothing of high importance scheduled today regarding either the GBP or the USD.

About the Author
Adam Lemon

Adam Lemon began his role at DailyForex in 2013 when he was brought in as an in-house Chief Analyst. Adam trades Forex, stocks and other instruments in his own account. Adam believes that it is very possible for retail traders/investors to secure a positive return over time provided they limit their risks, follow trends, and persevere through short-term losing streaks – provided only reputable brokerages are used. He has previously worked within financial markets over a 12-year period, including 6 years with Merrill Lynch.
Learn more from Adam in his free lessons at FX Academy

Currency Pairs:
Comments

Did you like what you read? Let us know what you think!

exclamation mark

Please make sure your comments are appropriate and that they do not promote services or products, political parties, campaign material or ballot propositions. Comments that contain abusive, vulgar, offensive, threatening or harassing language, or personal attacks of any kind will be deleted. Comments including inappropriate will also be removed.

0 User comments
Add Comment

exclamation mark

Please make sure your comments are appropriate and that they do not promote services or products, political parties, campaign material or ballot propositions. Comments that contain abusive, vulgar, offensive, threatening or harassing language, or personal attacks of any kind will be deleted. Comments including inappropriate will also be removed.

Read more
Add new comment
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.