GBP/USD Forex Signal: Double Top above 1.3300

Adam Lemon

After many days in retreat, the U.S. dollar is making a firm comeback today.

Yesterday’s signals were not triggered as none of the key levels were reached during yesterday’s London session.

Today’s GBP/USD Signals

Risk 0.75% per trade.

Trades may only be taken prior to 5pm 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 1.3241, 1.3271, or 1.3320.

  • Place 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 1.3199 or 1.3141.

  • Place 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.

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GBP/USD Analysis

I wrote yesterday that the chart had become more bullish technically with no key resistance ahead until 1.3320.

As both the pound and euro looked quite strong, I was prepared to take a long trade if we had gotten a retracement to the nearest support level at 1.3239 followed right away by a firm bullish bounce.

This was enough to stay out of trouble, as the level at 1.3239 was not even reached until after 5pm London time, and the price action sliced cleanly through it.

The price chart now presents a very different technical picture to that of yesterday, with a major medium-term bearish double top close to the resistance at 1.3320 looking obvious, with considerably more bearish short-term price action. After many days in retreat, the U.S. dollar is making a firm comeback today.

Despite this bearish case, we do see what looks like strong support extremely confluent with the round number at 1.3200. If we get a bullish bounce here, it is still a valid long trade entry and I would take it.

1.3200 is very likely to be today’s pivotal point. If we get two consecutive hourly closes below that level during today’s London session, the price might well fall over the rest of the week to the next support level at 1.3141.GBP/USDThere 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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