GBP/USD: Pound relatively strong and supported at 1.2624
Yesterday’s signals were not triggered as the daily low was a few pips above the support level identified at 1.2624.
Today’s GBP/USD Signals
Risk 0.75% per trade.
Trades may be entered before 5pm London time today only.
Short Trade Ideas
- Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.2750.
- 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.
- Take off 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
- Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of 1.2624.
- 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.
- Take off 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 yesterday that there was an accelerating long-term bullish trend here which suggested higher prices would be reached soon. I saw the nearby probable support at 1.2624 as a good potential entry point for a long trade, though I thought there would be little price movement.
This was an OK call as the price did make a bullish bounce just a few pips above 1.2624 and rose to hit the big quarter-number at 1.2750 late yesterday before making a strong bearish turn.
This bearish movement remains a normal bearish retracement within a valid bullish trend as long as the price remains above 1.2624. Therefore, a long trade following a bullish bounce at this level later still looks like an attractive trade.
The British Pound is relatively strong, considering that that USD is gaining ground during recent hours against almost every currency except the Japanese Yen.
I will take a bullish bias if we get a bounce at 1.2624 until the price hits 1.2750 again. There could be a bearish double top reversal at this level if it is hit later.
There is nothing of high importance due today concerning either the GBP or the USD.