Yesterday’s signals were not triggered, as neither of the key levels identified yesterday have been reached yet.
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
Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.2985 or the bearish trend line shown in the price chart below which is currently sitting at about 1.2931.
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 Idea
Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of 1.2785.
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 the Pound was bearish, and that we were unlikely to see the price pull back to the nearest resistance level, so a better approach to trading this pair short might be to just enter after short-term pullbacks fail. I thought that the price had plenty of room to fall quite a bit further, with no key support level in place above 1.2785.
This was not a good call as the price action was quite opposite to what I had expected, rising somewhat from the low made right at the start of the London session.
The price chart below shows that the technical picture here is dominated by a bearish trend line which connects the highs of the past few days. At the time of writing just before the start of the London session, the price is trying and failing to break above the trend line. There may be an opportunity for a short trade from a failure to break above the line if the failure continues into the London session.
The price still has a long way it could fall without hitting any key support levels.
If the price breaks above the trend line, there are a couple of resistance levels nearby, so any upside is likely to be limited.
There is nothing of high importance due today concerning the GBP. Regarding the USD, voting is underway in the U.S. presidential election.