My previous GBP/USD signal on 11th February was not triggered, as there was no bearish price action when the resistance levels were first reached.
Today’s GBP/USD Signals
Risk 0.75%.
Trades may only be taken before 5pm London today.
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Long Trade Ideas
- Long entry following a bullish price action reversal on the H1 timeframe immediately upon the next touch of $1.2572, $1.2544, or $1.2504.
- 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
- Short entry following a bearish price action reversal on the H1 timeframe immediately upon the next touch of $1.2667, $1.2679, or $1.2719.
- 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 GBP/USD forecast a little more than one week ago that the price was likely to remain contained between $1.2376 and $1.2471. I also thought that the support level below that at $1.2335 was likely to be pivotal. I was wrong about the first part but correct about the second part.
The technical picture has changed a lot, with the price having now broken out of its former bearish price channel. The price has risen quite bullishly over the past few days, breaking to a new multi-week high above $1.2600. The US Dollar’s bullish long-term trend has been invalidated.
The short-term price action is also very bullish, as it is a clear consolidation above a support level.
The British Pound is getting a boost from higher-than-expected UK CPI (inflation) data, which was released earlier today, showing an annualized rate of 3.0% while only 2.8% was expected.
The highs are looking a bit fragile, while the support level at $1.2572 looks strong.
I will be happy to take a long trade from a bounce off $1.2572. I expect higher prices here over the near term.
Concerning the GBP, there is nothing of high importance due today. Regarding the USD, there will be release of FOMC Meeting Minutes at 7pm.
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