GBP/USD Forex Signal: Lack of Direction

Adam Lemon

Range-bound between 1.3721 and 1.3900.

Last Monday’s GBP/USD signal was not triggered as there was no bearish price action when the anticipated resistance level at 1.3844 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 1.3898 or 1.3950.

  • 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 1.3785 or 1.3721.

  • 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 price looked likely to continue downwards to hit the support level at 1.3808 which was likely to be pivotal. This did not happen, so it was not a great call, but it was enough to keep out of trouble.

This pair remains range-bound between 1.3900 and 1.3721. The price action is choppy, and the price really seems to be going nowhere in particular making this currency pair very unattractive to trade.

The only good opportunities I see here as possible soon are reversals from 1.3900 or 1.3721. Until one of those levels are reached and we see how the price reacts there, this currency pair is probably best avoided by traders.

It might be that the British inflation data due this morning will give more direction to the price. A spike to one of the previously mentioned key levels could be good to fade.

GBP/USD

Regarding the GBP, there will be a release of CPI (inflation) data at 7am London time. There is nothing of high importance scheduled concerning the USD.

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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