Last Wednesday’s GBP/USD signals were not triggered, as there was no bullish price action at the key support levels that were reached that day.
Today’s GBP/USD Signals
Risk 0.75%.
Trades may only be taken 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 1.4176 or 1.4240.
- 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 Idea
- Long entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of 1.4139.
- 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 Wednesday that the technical picture had changed back yet again to look bullish as the price reached a level only about 50 pips below what would be a new multi-year high. However, the bullish momentum appeared to have run out of steam. I was still looking for a long trade from a firm bullish bounce at either 1.4178 or 1.4165. We did not get such a bounce, but the signal was at least enough to keep anyone out of trouble.
The technical picture remains bullish, but only weakly so, even though the price is not far from a new multi-year high price. However, there is only one support level holding up the price, at 1.4139, and if this breaks down the technical situation would become bearish, so I see that level as a definite pivotal point for today.
We are seeing a pattern of higher highs and higher lows, but they are not very convincing.
Another factor that increases my doubts over the odds in favour of bulls right now is that today is Monday and, at the time of writing, we have not even entered the London session yet, so direction remains predictable.
I think the best approach today will be to pay attention to 1.4139. I am prepared to take a long trade from a firm bullish bounce there if it sets up during the first half of today’s London session.
Regarding the GBP, the Governor of the Bank of England will be testifying before Parliament at 3:30pm London time. There is nothing of high importance due concerning the USD.