Today’s GBP/USD Signals
Risk 0.75%.
Trades may only be taken 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 1.4021, 1.4051, or 1.4126.
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
Long entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of 1.3879, 1.3845, or 1.3818.
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
The past few weeks have been an interesting time in the Forex market in general and for this currency pair particularly. Although the U.S. dollar has begun to recover from its long-term bearish trend, we have seen the British pound make long-term high prices of its own, meaning that until a few days ago the price here continued to advance and make new multi-year high prices, before climaxing dramatically last week right at the resistance level I had identified at 1.4240.
The strong advance by the USD and sell-off in riskier assets was partially triggered by the yield on 10-year U.S. treasuries exceeding 1.5%, which is the dividend on the S&P 500 Index.
We have seen a bit of a recovery by the price over recent hours, but again, we are seeing the action turn somewhat bearish once 1.4000 was hit again just before today’s London session got underway.
Although there are some data events due today, as it is a Monday and due to the consolidative price action, I am not expecting the price to do anything special here today. If pushed, I prefer short to long trades, but I think that the price is just going to trade sideways between 1.4000 and 1.3900 over the coming hours of today’s London session.
Regarding the GBP, there will be a release of Final Manufacturing PMI data at 9:30am London time. Concerning the USD, there will be a release of ISM Manufacturing PMI data at 3pm.