Yesterday’s signals produced a profitable short trade at the bearish pin candlestick which rejected the resistance level of $3,914. It would probably be wise to close this trade as it looks doubtful whether it will fall any further, with $3,844 threatening to act as support.
Today’s BTC/USD Signals
Risk 0.75% per trade.
Trades must be entered before 5pm Tokyo time today only.
Long Trades
- Go long after a bullish price action reversal on the H1 time frame following the next touch of $3,844 or $3,570.
- Put the stop loss 1 pip below the local swing low.
- Move the stop loss to break even once the trade is $200 in profit by price.
- Remove 50% of the position as profit when the trade is $200 in profit by price and leave the remainder of the position to ride.
Short Trades
- Go short after a bearish price action reversal on the H1 time frame following the next touch of $3,914 or $4,100.
- Put the stop loss 1 pip above the local swing high.
- Move the stop loss to break even once the trade is $200 in profit by price.
- Remove 50% of the position as profit when the trade is $200 in profit by price 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.
BTC/USD Analysis
I wrote yesterday that the technical picture was quite bearish despite the price’s reluctance over recent days to fall lower, with a symmetrical bearish channel and its upper trend line confluent with two horizontal resistance levels. This suggests that a bearish rejection of $3,847 would be the best potential set-up. If the price could alternatively get established above $3,914 that would be a bullish sign.
The price rose unexpectedly but was unable to break above $3,914. However, the price has broken up out of the bearish channel, and the former resistance close to $3,844 now seems to be acting as support. If that level holds it will be a slightly bullish sign, and if the price can break above $3,914 it would be an even more bullish sign. I would be bullish if the price can trade above $3,914 later for at least one hour.
Regarding the USD, there will be a release of ISM Manufacturing PMI data at 3pm London time.
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