GBP/USD Forex Signal: Consolidation Between 1.3617, 1.3759

Adam Lemon

The British pound remains a relatively strong currency.

Last Monday’s GBP/USD signals were not triggered, none of the key support or resistance levels were reached that day.

Today’s GBP/USD Signals

Risk 0.75%.

Trades must be entered 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 1.3617, 1.3588, 1.3560, or 1.3527.

  • 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 Monday that we were seeing a pressured consolidation ready for a bullish breakout beyond 1.3759. I was ready to buy the breakout and I was also looking to go long at 1.3617 even if the breakout did not happen or if it failed.

In one sense I was wrong, as the resistance level at 1.3759 held with the high of the day being only 1 pip below it. In another sense I was correct, at least in terms of what happened yesterday, as the price made a bullish bounce at the support level of 1.3617 just as I had anticipated.

It is very clear looking at the price chart below that this currency pair is moving in a wide, evenly balanced consolidation between the support at 1.3617 and the resistance at 1.3759. This pair and the Forex market are quite evenly balanced right now, so I take no real bias either long or short, although there is a long-term bullish trend and relative strength in the British pound, even though the dollar has been gaining some ground this week.

I am happy to take either a long trade from another bounce at 1.3617 or a short trade from a bearish reversal which may set up again at 1.3759.

GBP/USD chart

Regarding the GBP, there will be a release of Final Services PMI data at 9:30am London time. Concerning the USD, there will be a release of the ADP non-farm employment change forecast at 1:15pm.

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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