GBP/USD Forex Signal: Medium-Term Bullish

Adam Lemon

GBP/USD: Pivotal point at 1.2906

Yesterday’s signals produced a profitable long trade from the bullish outside candlestick on the hourly chart which rejected the support level identified at 1.2906. It may be wise to exit any remainder of this trade now as the bullish movement seems to have out of steam.

Today’s GBP/USD Signals

Risk 0.75% per trade.

Trades must be taken between 8 am and 5 pm London time today only.

Short Trade Ideas

  • Short trade entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.3023, 1.3079, or 1.3115.
  • Put the stop loss 1 pip above the local swing high.
  • Move the stop loss to break even once the trade is 25 pips in profit.
  • Remove 50% of the position as profit when the price reaches 25 pips in profit and leave the remainder of the position to run.

Long Trade Ideas

  • Long trade entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of 1.2906.
  • Put the stop loss 1 pip below the local swing low.
  • Move the stop loss to break even once the trade is 25 pips in profit.
  • Remove 50% of the position as profit when the price reaches 25 pips in profit and leave the remainder of the position to run.

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 it would not be a surprise if we saw the price here turn bearish later and break down below 1.2900 and perhaps reach 1.2785.

However, if the price kept making a bullish rejection of 1.2906 during the first hour or two of the London session, I thought that would suggest we were likely to see somewhat higher prices.

This was a good either/or call as the second scenario played out precisely and did indicate higher prices over the course of the day, giving a profitable long trade signal.

It seems that the price has turned bearish now, ready to make a retracement. This is nothing unusual and we can expect a bearish pullback without invalidating the medium-term bullish picture if the price does not get established below the nearest support level at 1.2906.

I will be happy to take another long trade if the price hits 1.2906 later and gives a bullish bounce rejecting that price level.

We may also see support between 1.2950 and 1.2964.

GBP/USD

There is nothing of high importance scheduled today concerning the GBP. Regarding the USD, the Chair of the Federal Reserve will be giving a minor speech at 3:40 pm London time.

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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