Last Wednesday’s GBP/USD signals were not triggered, as there was no bullish price action when the support level at 1.4116 was first reached.
Today’s GBP/USD Signals
Risk 0.75%.
Trades may only be taken prior to 5pm London time today.
Short Trade Ideas
- Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.4123 or 1.4200.
- 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 1.4098 or 1.4010.
- 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 was not changing, with the price continuing to range between 1.4200 and 1.4100. I thought that there might be a breakout on Thursday, but I saw the best opportunities here for Wednesday as likely to arise at any reversals which might set up at either 1.4200 or 1.4116.
The price did reach 1.4116 on Wednesday but continued to fall before turning bullish the next day after the 1.4100 held, so my prediction that the ranging environment support at 1.4100 would hold turned out to be correct.
The 1.4100 area is under pressure again, and we see this multi-week consolidation now starting to look heavy as the U.S. dollar seems to be emerging as the strongest major currency. This suggests that we are becoming increasingly likely to see a strong bearish breakdown below the lower boundary of the recent consolidation pattern at 1.4100.
If we get two consecutive lower hourly closes today below 1.4087, I think we will be likely to see a fast move down to the 1.4000 area, so I will take a bearish bias if that scenario sets up.
I do not want to go short from 1.4123 before that breakdown happens.
There is nothing of high importance due today concerning the GBP or the USD.