GBP/USD Forex Signal

Last Thursday’s signals were not triggered, as the bullish price action took place below the support level identified at 1.2858.

Today’s GBP/USD Signals

Risk 0.75% per trade.

Trades may only be entered before 5pm London time today.

Short Trade  

• Go short following a bearish price action reversal on the 1H1 time frame H1H1H1 time frame immediately upon the next touch of 1.2818 or 1.2842.

• 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.

Long Trades   

• Go long following a bullish price action reversal on the 1H1 time frame H1H1H1 time frame immediately upon the next touch of 1.2616.

• 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.

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 last Thursday that I would again take a bearish bias here if the price would be below 1.2858 at 9am London time. It was, and although the price rose over the immediately subsequent hours, it quickly broke down again to continue to fall much lower, so it was a good medium-term call. The market is dominated by concerns over Turkey and its currency which fell by more than 25% last week and has again reached an all-time low price since the market opened this week. European banks are likely to be exposed to any contagion, so the situation is dragging down all risk assets, but especially the Euro which can have a knock-on effect upon the Pound. It is likely that there will be further volatile swings in price which will depend upon the defensive measures the Turkish central bank is likely to outline shortly, so it is hard to predict which way the price will move today – there may well be a strong move in either direction, but a downwards move could travel further if the Turkish central bank is unable to stop the slide in the Lira. There have been signs in recent hours that the Lira has begun to stabilize.

Over the short-term, we see a very flat consolidation, suggesting there will be much more movement as soon as London opens.

There is nothing important due today concerning either the GBP or the USD.