GBP/USD: Pound catching up with the Euro
Yesterday’s signals produced an excellent, profitable long trade from the bullish bounce at the support level identified at 1.2520. It will probably be wise to exit from the remainder of any of this position now.
Today’s GBP/USD Signals
Risk 0.75% per trade.
Trades must be entered before 5 pm London time today.
Short Trade Ideas
- Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.2625, 1.2670, or 1.2709.
- 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
- Long entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of 1.2582 or 1.2520.
- 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 I would take a long trade if we had gotten a firmly bullish hourly candlestick soon rejecting 1.2520 and ideally also 1.2500, which closed above 1.2540.
This was a great call and I was really right to look for a bullish bounce in this area despite the Pound’s weakness.
Renewed risk-on sentiment has pushed the price up, breaking the former resistance at 1.2582 and flipping it to become likely new higher support.
Despite the bullishness, we are seeing the resistance level at 1.2625 holding as we go through the first half of today’s London session, which is not a surprise given the medium-term price range we are still in despite the short-term bullishness.
The GBP/USD currency pair is more bullish, as it is breaking to new long-term high prices above 1.1400.
Scalpers may have some fun today looking for short pips off 1.2625. Swing traders should probably exit any longs and go flat.
There is nothing of high importance scheduled today regarding either the USD or the GBP.