Yesterday’s signals produced a profitable short trade from the bearish rejection of the resistance level identified at 1.2975, although the profit was limited to little more than a maximum of 25 pips.
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 1.3079 or 1.3015.
- Put the stop loss 1 pip above the recent 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 1.2993 or 1.2975.
- Put the stop loss 1 pip below the recent 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 we had both a dominant bearish trend line but also a double bottom at 1.2863. This area may be supportive the next time it is reached.
I saw the very best opportunity which might set up as a short trade from a bearish reversal at 1.3079. However, the price never got close to this level.
The technical picture has changed, and we may be seeing the start of a bullish breakout above the medium-term bearish trend line which is confluent with the 1.3000 price area. However, this area at about 1.3025 has also been inflective so there could be minor resistance there.
The price has room to rise higher, so if we see an hourly close during the first half of the London session today above 1.3025, I will take a bullish bias to 1.3079.
The advance by the Pound has probably been helped by the slightly higher than expected U.K. inflation data released earlier today, at an annualized rate of 0.5%.
If 1.3079 or even 1.3115 are reached later, I think either level will be very likely to hold.
There is nothing of high importance due today concerning either the GBP or the USD.