My previous GBP/USD signal yesterday did not produce a trade.
Today’s GBP/USD Signals
- Risk 0.75%.
- Trades may only be entered before 5pm London time today.
Long Trade Idea
- Go long following a bullish price action reversal on the 1H1 time frame H1H1H1 timeframe immediately upon the next touch of $1.2500.
- 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 1H1 time frame H1H1H1 timeframe immediately upon the next touch of $1.2563 or $1.2589 or $1.2609.
- 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.
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GBP/USD Analysis
I wrote in my previous GBP/USD forecast yesterday that the resistance level at $1.2589 looked likely to be strong, but I was wrong about that.
Both currencies are strong, so the price is not showing much directional movement.
We have an interesting technical setup guarding the dominant range: there is a bearish double top at $1.2609 and a strong area of support centred on the big round number at $1.2500.
I think the price is likely to remain between these two levels today, so a bounce off either of them could be a good trade entry.
The area of resistance at $1.2563 could also be strong.
Be conservative with profit taking, as it is the final trading day of 2024, and there could be liquidations for calendar and tax reasons that might produce strange movements in the price, although that probably won’t be manifested here but more in the US stock market.
There is nothing of high importance due today concerning either the GBP or the USD.
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