Today’s GBP/USD Signals
Risk 0.75%.
Trades may only be entered before 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 1.3647 or 1.3759.
Put the stop loss 1 pip above the local swing high.
Adjust the stop loss to break even once the trade is 20 pips in profit.
Take off 50% of the position as profit when the price reaches 20 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 1.3551 or 1.3527.
Put the stop loss 1 pip below the local swing low.
Adjust the stop loss to break even once the trade is 20 pips in profit.
Take off 50% of the position as profit when the price reaches 20 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
The price hit another new 2.5-year high price yesterday just above 1.3700 before falling sharply on a general profit taking of risky assets, although the pound was hit relatively hard compared to other risky currencies. This was reinforced by the growing realisation that the U.K. has a serious problem with coronavirus which could realistically only be tackled by a new tough lockdown, which was duly announced by the British government late yesterday after being leaked some hours before.
Although the downwards movement was quite strong, the price was able to find seemingly solid support at 1.3551 where it bounced and has continued to rise from. Looking at the price chart below, the long-term bullish trend does not appear to have been significantly impacted by this day’s fall, and the short-term price action suggests that the price is poised to move higher over the coming days.
I am ready to enter a new long trade if we get another bullish bounce at either of the support levels I identified above.
There is nothing of high importance scheduled today regarding the GBP. Concerning the USD, there will be a release of ISM Manufacturing PMI data at 3 PM London time.