My previous GBP/USD signal last Thursday was not triggered.
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 $1.3153 or $1.3141.
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.
Move 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 $1.3286, $1.3370, or $1.3402.
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.
Move 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.
I wrote in my previous GBP/USD forecast last Thursday that I was bearish and was looking for a short trade from $1.3396 as the best opportunity. I was correct about the direction, but that level did not produce a trade, the bearish turn was a few pips higher.
The price has continued to descend and be contained within the bearish price channel which is shown as a descending linear regression analysis within the price chart below. The price has made short-term bullish price action off the bottom of the channel, so the channel is being respected, and is ascending weakly.
It looks like the closest resistance level at $1.3286 is going to be tested. If we get a bearish reversal there, that will probably be pivotal and provide a good short trade entry. If the price gets established above that level, it will likely have the freedom to rise as high as $1.3340 and maybe even as high as $1.3370.
I would prefer the short trade, although there are signs that the market today is enjoying more risk-on sentiment, which would tend to push this currency pair upwards, after a lot of nervousness helped send the price lower.
The nervousness was due to the war in the middle east, so the less nervous environment today is a sign that the war is going badly for Iran, or it may be due to hope that the Strait of Hormuz will be reopened by President Trump’s multinational plan to break the blockade, although that seems an unlikely prospect.
There is nothing of high importance scheduled today regarding either the GBP or the USD.
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