GBP/USD Forex Signal: Bullish

GBP/USD: Trading above 1.2600 handle

Yesterday’s signals were not triggered as there was no bullish price action at 1.2531 or bearish price action at 1.2613.

Today’s GBP/USD Signals

Risk 0.75% per trade.

Trades may only be taken between 8 am and 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 1.2670 or 1.2709.
• 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 1.2598, 1.2584, or 1.2520.
• 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 the break above 1.2550, even though it had not been sustained yet, and the new higher support level at 1.2531, were significant bullish signs pointing to a further rise in the price as likely to happen over the short term.

This was a good and accurate call as I was correct about the price rising yesterday.

We now see the price trading well above 1.2600, and the Pound performing today more positively than the Euro, both of which are bullish signs.

There is a reason why bulls should be cautious: the 1.2650 area acted as pivotal resistance earlier in the year, so what happens next in this 1.2650 to 1.2750 area should tell us a lot about the strength of this bullish movement.

It may be best to stand aside today, but the U.S. Dollar is certainly in retreat, and it is hard to see what will change that before next week. Therefore, I am ready to take a long trade from a bullish bounce which may set up later at any of the support levels identified above.

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