GBP/USD Forex Signal: Bearish Price Channel

Adam Lemon

GBP/USD: Pivotal support at 1.2975 / 1.3000

Last Thursday’s signals were not triggered as there was no bullish price action during the London session when the support levels identified at 1.3115 and 1.3079 were first reached.

Today’s GBP/USD Signals

Risk 0.75% per trade.

Trades may only be taken between 8am and 5pm 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 1.3055, 1.3115, or 1.3180.
  • 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

  • Long entry 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 last Thursday that the price was now at its highest level in about six weeks. In the absence of any new rumours about trade negotiations, I through that the price was likely to trade higher.

I was looking to take a long trade from a bullish bounce at either 1.3115 or 1.3079 if we got that during the first half of the day’s London session.

I was wrong about seeing higher prices over the course of the day as the price fell steadily. However, waiting for bounces at the key levels was good enough to keep out of trouble, as it triggered no long trade signals.

The technical picture now shows no major trend, but we do have a symmetrical bearish price channel since last Wednesday, with symmetrical trend lines suggesting the channel is likely to be reliable. This channel suggests that a short-term long trade from the area between 1.3993 and 1.2964 could be OK, but that a short trade from a bearish rejection of 1.3055 would be likely to be even better. The problem with a short trade from 1.3055 is that it will quite quickly run up against the support at about 1.2993 so might not run very far.

I think the best approach here today will be to scalp off 1.3055 or 1.2993 and be ready to take profit quickly.GBPUSDThere is nothing of high importance due today concerning either the GBP or the USD.

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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