GBP/USD Forex Signal: Consolidating Quietly

Adam Lemon

The price is trading between $1.3525 and $1.3600.

Last Wednesday’s GBP/USD signal was not triggered as there was no bullish price action when the support level identified at $1.3625 was first reached that day.

Today’s GBP/USD Signals

Risk 0.75%.

Trades must be taken between 8amand 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 $1.3606 or $1.3638.

  • Put the stop loss 1 pip above the local swing high.

  • Adjust the stop loss to break even once the trade is 20 pips in profit.

  • Take off 50% of the position as profit when the price reaches 20 pips in profit and leave the remainder of the position to run.

Long Trade Ideas

  • Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of $1.3523 or $1.3411.

  • Put the stop loss 1 pip below the local swing low.

  • Adjust the stop loss to break even once the trade is 20 pips in profit.

  • Take off 50% of the position as profit when the price reaches 20 pips in profit and leave the remainder of the position to run.

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 price direction looked difficult to predict. The only opportunity I saw following the FOMC release that day was to have a limit buy order at $1.3502 and a limit sell order at $1.3709, and hope that the release spiked the price to hit one of these levels.

This was a call in the right direction as the price rose to within a few pips of $1.3709 before falling strongly, so I was on the right track. However, ultimately there was not really an opportunity here.

Unfortunately, the situation is essentially unchanged, with the price trading very flatly between $1.3525 and $1.3600. There is no true trend on any time frame.

The only potential opportunity I see here would be to trade long from a bearish rejection of $1.3606 which stands out as the only nearby level which has been pivotal both long and short over recent days. Due to the low volatility, this will probably be best exploited by scalping it if it sets up.

GBP/USD

Regarding the USD, there will be a release of CPI data at 1:30pm London time. There is nothing of high importance scheduled regarding the GBP.

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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