Last Thursday’s signals may have produced a profitable or break-even short trade from the bearish rejection of the resistance level identified at 1.3195.
Today’s GBP/USD Signals
Risk 0.75% per trade.
Trades must be entered between 8am and 5pm London time today only.
Short Trade Ideas
Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.3250, 1.3320, or 1.3370.
Put the stop loss 1 pip above the recent 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 entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of 1.3195 or 1.3141.
Put the stop loss 1 pip below the recent 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 last Thursday that the technical picture had become significantly more bearish, despite the valid long-term bullish trend, because we had seen the price clearly print new lower resistance levels which it seemed to be respecting.
This was a good and accurate call, as the price eventually rejected the level more decisively and moved down to a low just above 1.3100 before recovering the next day.
The picture is more bullish now as risk-on sentiment has become more firmly established in the market, with the U.S. dollar weakening everywhere as more risky currencies such as the British pound continue to gain. This has pushed the price up to an area not far from its highest 50-day close. A break above the resistance level at 1.3320 would be a bullish sign showing the price reaching to new long-term highs. However, bulls still have to overcome an area of resistance confluent with the major psychological quarter-number at 1.3250. There is also a resistance level just a little way below at 1.3228 which is currently holding.
I am prepared to take a long trade today if we get two consecutive hourly closes above 1.3250 during the first few hours of the London session, provided that the price is not too close to 1.3320 at that time, which is the natural short-term take profit target.
There is nothing of high importance due today concerning either the GBP or the USD.