Yesterday’s signals were not triggered, as there was insufficiently bearish price action when the price reached the resistance level identified at 1.3993.
Today’s GBP/USD Signals
Risk 0.75% per trade.
Trades may only be entered before 5pm London time today.
Long Trade
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Long entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of 1.3981.
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Place the stop loss 1 pip below the local swing low.
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Move the stop loss to break even once the trade is 25 pips in profit.
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Take off 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
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Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.4090.
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Place the stop loss 1 pip above the local swing high.
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Move the stop loss to break even once the trade is 25 pips in profit.
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Take off 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
Yesterday, I wrote that although I had no directional bias, I saw the Pound as weaker against the U.S. Dollar than other major currencies such as the Japanese Yen and the Euro. Everything moved up against the U.S. Dollar yesterday, including the British Pound, but the price below justifies this view because the bullishness here is relatively muted. The price is still above the psychologically important 1.4000 level, but only barely. There is a support level at 1.3981, but it doesn’t look strong and I do not have a lot of confidence that it will hold. If the Dollar comes back today, the price should move down from here quite easily. For this reason, I again have no directional bias here, despite the long-term bullish trend. This pair will probably be best used today as a short trade if the U.S. Dollar comes back, as it would probably move further against the Pound than against most other currencies.
There is nothing due today concerning the GBP. Regarding the USD, there will be a release of PPI data at 1:30pm London time.
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