GBP/USD Forex Signal: Very Bullish Above 1.3710

Adam Lemon

The technical picture has become much more bullish, as riskier currencies such as the Pound have all strengthened against a weaker U.S. Dollar over the previous day.

Last Tuesday’s GBP/USD signals produced a losing short trade from the apparent bearish reversal at 1.3621.

Today’s GBP/USD Signals

Risk 0.75%.

Trades must be taken between 8am and 5pm London time today only.

Short Trade Ideas

  • Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.3759 or 1.3822.
  • Place the stop loss 1 pip above the local swing high.
  • Move the stop loss to break even once the trade is 20 pips in profit.
  • Remove 50% of the position as profit when the price reaches 20 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 1.3667 or 1.3621.
  • Place the stop loss 1 pip below the local swing low.
  • Move the stop loss to break even once the trade is 20 pips in profit.
  • Remove 50% of the position as profit when the price reaches 20 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 last Tuesday that bulls were failing to push the price beyond the key resistance level at 1.3621, which looked pivotal, so the upside may be limited. However, I doubted that we would see a lot of downwards movement, so I thought it wisest to stand aside from trading this currency pair for the day.

This was a good and accurate forecast as the price rose over the day, but not by much.

The technical picture has become much more bullish, as riskier currencies such as the Pound have all strengthened against a weaker U.S. Dollar over the previous day.

The British Pound is one of the relatively strong major currencies. Yesterday it managed to trade above the round number at 1.3700 and briefly hit a new 2.5-year high price, which is a bullish sign.

There is a long-term bullish trend, although the trend is moving relatively slowly.

Yesterday saw a release of British inflation data which came in a little higher than expected. This is probably not a major driver of the price but might be adding a little momentum to the rise in the Pound as it strengthens the fundamental case against cutting interest rates any further.

The price has room to rise if it can clear the area of recent inflective swing highs just above the current price. If we get two consecutive hourly closes above 1.3704 during the first half of the London session, I will take a bullish bias until 1.3750.GBPUSDThere is nothing of high importance scheduled today regarding 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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