GBP/USD Forex Signal: More Bullish Above 1.3000

Adam Lemon

GBP/USD: Slow medium-term bullish trend

Last Thursday’s signals were not triggered, as unfortunately, the bullish price action took place slightly below the support level identified at 1.2904.

Today’s GBP/USD Signals

Risk 0.75% per trade.

Trades may only be entered 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 1.3079, 1.3115, or 1.3180.
  • Put 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 1.2973.
  • Put 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.

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GBP/USD Analysis

I wrote last Thursday that I was prepared to take a long trade from a bullish bounce at 1.2929 or a short trade from a bearish reversal at either 1.3000 or 1.3023, whichever happened first. I thought that the price was more likely to rise than fall over the day.

In fact, the price went sideways last Thursday but has risen considerably since as momentum resumed in the long-term bearish trend in the U.S. Dollar.

The Pound has been relatively strong and the fact that the price now seems to be established above 1.3023 and the round number at 1.3000 is a bullish sign. We see this morning the price advancing quite firmly although as it is Monday, it is no surprise that volatility is relatively low.

I think there is a good chance that the next resistance level at 1.3079 will be reached soon. The level above that at 1.3115 has acted as strong resistance so I think a short trade from a bearish reversal here could be a good trade if it sets up. However, this will likely require patience as volatility is likely to drop off strongly after the first half of the London session is over.

GBP/USD

There is nothing of high importance due today regarding either the USD or the GBP. It is a public holiday in the U.S.A. today.

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

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