GBP/USD Forex Signal: Consolidating Below $1.2000

No clues as to short-term direction today.

My previous GBP/USD signal last Wednesday was not triggered, as none of the key support and resistance levels I had identified were reached that day.

Today’s GBP/USD Signals

Risk 0.75%.

Trades must be taken between 8am and 5pm London time today only. 

Long Trade Ideas

  • Go long following a bullish price action reversal on the H1 timeframe immediately upon the next touch of $1.1819, $1.1721, or $1.1602.
  • Place the stop loss 1 pip below the local swing low.
  • Move the stop loss to break even once the trade is 25 pips in profit.
  • Remove 50% of the position as profit when the price reaches 25 pips in profit and leave the remainder of the position to ride.

Short Trade Ideas

  • Go short following a bearish price action reversal on the H1 timeframe immediately upon the next touch of $1.1868 or $1.2003.
  • Place the stop loss 1 pip above the local swing high.
  • Move the stop loss to break even once the trade is 25 pips in profit.
  • Remove 50% of the position as profit when the price reaches 25 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 in my previous forecast last Wednesday that we were probably due for a period of consolidation below $1.2000. This was a good call. I was looking for a long trade from a

bullish bounce at $1.1822 but the price never quite made it to that level, with the low of the day a few pips higher.

The consolidation has not only continued but has flattened out even further. The price is currently right in the middle of its recent zone of comfort and has both support and resistance very closed by and evenly spaced. There are no real signs of short-term direction at all, so I see trading this currency pair right now as just a gamble which should probably be avoided until we get some more definite directional movement.

There are no key data releases scheduled today for either of these two currencies, so there is no reason to expect that the market will necessarily liven up today.

In the unlikely event that the price reaches either $1.2003 or $1.1721, there could be opportunities for reversal swing trades at these levels.

There is nothing of high importance scheduled today concerning either the GBP or the USD.

GBP/USD

Ready to trade our free trading signals? We’ve made a list of the best brokers to trade Forex worth using.

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

Did you like what you read? Let us know what you think!

exclamation mark

Please make sure your comments are appropriate and that they do not promote services or products, political parties, campaign material or ballot propositions. Comments that contain abusive, vulgar, offensive, threatening or harassing language, or personal attacks of any kind will be deleted. Comments including inappropriate will also be removed.

0 User comments

exclamation mark

Please make sure your comments are appropriate and that they do not promote services or products, political parties, campaign material or ballot propositions. Comments that contain abusive, vulgar, offensive, threatening or harassing language, or personal attacks of any kind will be deleted. Comments including inappropriate will also be removed.

Read more
Add new comment
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.