Last Thursday’s GBP/USD signals produced profitable signals both short from 1.3667 and long from 1.3621.
Today’s GBP/USD Signals
Risk 0.75%.
Trades may only be entered prior to 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 1.3621 or 1.3667.
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 1.3560, 1.3527, or 1.3502.
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
I wrote last Tuesday that the price was well contained within a symmetrical bearish price channel over the medium term, which was a bearish sign. I saw a good potential short trade at 1.3600, but the price consolidated below that area of resistance instead of reversing cleanly, avoiding generating a short trade entry signal.
My call was useful in a way, as the break above the upper trend line of the bearish price channel which I identified that way produced a meaningful directional move up of about 100 pips. The price then went on to fail at about 1.3700, which may now have printed a bearish double top – this is a long-term high price peak, although it may still be broken soon.
There is a long-term bullish trend in this currency pair, but I am wary of taking any new long trades right now while the price remains below 1.3700, as it looks like it could act as strong resistance.
I think the support level at 1.3621 will be pivotal today, but the price is likely to be relatively choppy and not give a great deal of opportunity either above or below that. A long trade from a bullish bounce at 1.3621 would probably be the best potential trade set-up.
There is nothing of high importance scheduled today regarding either the GBP or the USD.