My previous GBP/USD signal on 22nd November was not triggered as there was no bullish price action when either of the identified support levels were first reached.
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 $1.2587 or $1.2545.
- Put the stop loss 1 pip below the local swing low.
- Adjust the stop loss to break even once the trade is 25 pips in profit.
- Take off 50% of the position as profit when the price reaches 25 pips in profit and leave the remainder of the position to run.
Short Trade Ideas
- Go short following a bearish price action reversal on the H1 timeframe immediately upon the next touch of $1.2635, $1.2643, or $1.2694.
- Put the stop loss 1 pip above the local swing high.
- Adjust the stop loss to break even once the trade is 25 pips in profit.
- Take off 50% of the position as profit when the price reaches 25 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 in my previous forecast for the GBP/USD currency pair that if we got two consecutive lower hourly closes below the big round number at $1.2500, we would see a stronger fall over the rest of the day, so the area between $1.2500 and $1.2517 looked likely to be pivotal.
This was a good call, but the lower hourly closes were so strong that they pushed the price down almost as far as the nearest support, so the price had no more room to fall, so there was not a good opportunity there.
The technical picture has become more bullish, as the price continues to advance to new 2-month highs above $1.2600. The bullish momentum is weak, but the US Dollar is falling within a long-term bearish trend, and this suggests higher prices are most likely here. However, it’s a quiet Monday and we might not see much action in the market today.
I see the technical picture as basically bullish as long as the price remains above the nearest support level at $1.2587, so I am prepared to enter a new long trade from any bullish bounce which we might get off this level, especially if the rejection respects the round number at $1.2600 as well.
There is nothing of high importance scheduled today concerning either the GBP or the USD.
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