My previous GBP/USD signal on 17th January was not triggered, as none of the key levels were reached that day.
Today’s GBP/USD Signals
Risk 0.75%.
Trades must be taken before 5pm London time today.
Long Trade Ideas
- Go long following a bullish price action reversal on the H1 timeframe immediately upon the next touch of $1.2301 or $1.2230.
- 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 $1.2394 or $1.2437.
- 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 for the GBP/USD currency pair that a long trade from any bullish bounce which we might see at $1.2100 would probably be the best setup that might happen that day. This was a good call as although that level was not reached, I was right to look to the long direction as the price rose strongly over the day.
We have seen the long-term trend against the US Dollar continue but weaken in its momentum. The Pound has recently begun to rise just as strongly as the Euro, sending this currency pair to briefly touch a new long-term high yesterday a little way above the resistance level at $1.2437. The price fell back and printed a new lower resistance level at $1.2394, which is an initial sign that the price might be topping out. However, the price has begun rising again firmly after this dip, and at the time of writing is very close to testing that resistance level.
I think that the momentum, although weak, will remain with the bulls, but that the bulls will be unable to push the price much higher than $1.2437 today.
I would not take any short trade today except from a second strong bearish rejection of $1.2437, which would complete a firm double top chart pattern, which would be a bearish sign.
Concerning the GBP, there will be a release of Flash Services and Manufacturing PMI data at 9:30am London time. Regarding the USD, there will be a release of Flash Services PMI data at 2:45pm.
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