.Last Monday’s GBP/USD signal was not triggered as there was no bullish price action when the support level identified at 1.3674 was first reached that day.
Today’s GBP/USD Signals
Risk 0.75%.
Trades may only be taken between 8am and 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 1.3699, 1.3721, or 1.3765.
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 1.3588 or 1.3560.
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 the bearish technical environment with the price breaking strongly to new lows suggested that short trades have a higher probability of success provided the price remained below the nearest resistance level at 1.3721. This was a good call as the price remained below 1.3721 all day and moved lower over the day.
The technical picture has changed little since last Monday, with the situation still looking bearish, and maybe slightly more so as the GBP and EUR now look weaker than the commodity currencies. The USD is still rising, and we still have a broadly risk-off market environment, so there seems to be every reason to be bearish on this currency pair today.
Support begins at 1.3588 and there are several support levels placed nearby below that, so I suspect that the price will find it hard to fall below 1.3588 for a while.
I see the next directional price movement as likely to be bearish but of course that can change in an instant when the FOMC release comes later. Before the release, I see the best opportunities here as likely to be short trades at or below 1.3700 on a short-term timeframe with conservative profit targets.
Concerning the USD, there will be releases of the FOMC Statement, Federal Funds Rate, and Economic Projections at 7pm London time, followed by the usual press conference half an hour later. There is nothing of high importance scheduled today regarding the GBP.