My previous GBP/USD signal on 2nd December was not triggered.
Today’s GBP/USD Signals
Risk 0.75%.
Trades must be taken prior to 5pm Tokyo time Friday.
Long Trade Ideas
- Long entry following a bullish price action reversal on the H1 timeframe immediately upon the next touch of $1.3326, $1.3289, or $1.3268.
- 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.
- Remove 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
- Short entry following a bearish price action reversal on the H1 timeframe immediately upon the next touch of $1.3352, $1.3372, or $1.3397.
- 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.
- Remove 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 two days ago that if the price retreated to $1.3201 and made a bounce there, it would be an attractive long trade entry. I was broadly correct although the price fell below that level for a while, so it was not a clean bounce giving a well-defined entry signal.
The price has risen strongly and is rising again today, and the US Dollar is broadly bearish against almost every other currency. This suggests strongly that it will make sense to remain on the bullish side here.
At the time of writing this shortly after the London Open, the price is rising, trading at the high of the day, and has already broken through a former key resistance level at $1.3352.
I think it makes sense to look for long trades here. Usually, the best way to trade this currency pair is to wait for a consolidation or dip, and then to trade the breakout, paying attention to doing this within a god reward to risk framework.
There is nothing of high importance scheduled today regarding the GBP. Concerning the USD, there will be a release of Unemployment Claims at 1:30pm London time.
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