Yesterday’s signals were not triggered, as there was no bullish price action when the support levels at 1.3008 and 1.2973 were first reached.
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 1.2971 or 1.3008.
- 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 1.2785.
- 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.
GBP/USD Analysis
I wrote yesterday that I was happy to maintain a bullish bias between 1.3008 and was seeking to enter a new long trade from a bullish bounce at 1.3008.
This was not a great call, as the price fell strongly over the day, breaking very cleanly downwards through both of the key support levels which were reached.
The British Pound is weak as it is looking increasingly likely that a final status trade deal between the E.U. and the U.K. will not be agreed upon by the deadline at the end of 2020, and this is having a negative impact upon the Pound.
Technically, there is no long or even medium-term trend in this currency pair, so trading reversals at extremes or trading on shorter time frames along with a prevailing market sentiment from day to day are likely to be the best trading strategies.
The price may well now find some short-term support at 1.2850, but if it can break below that, may then go on to fall lower down to 1.2785.
There is nothing of high importance due today regarding the GBP. Concerning the USD, there will be a release of PPI data at 1:30 pm London time.