GBP/USD: Bulls have possible small edge
Last Tuesday’s signals produced a nicely profitable long trade from the bullish price action which rejected the support level identified at 1.2537.
Today’s GBP/USD Signals
Risk 0.75% per trade.
Trades must be entered before 5pm London time today only.
Short Trade Idea
Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.2571 or 1.2624.
Place 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 ride.
Long Trade Ideas
Long entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of 1.2443 or 1.2411.
Place 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 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
I wrote last Tuesday that I was still bullish and if the price could make an hourly close later above 1.2575, I would enter a long trade and stay bullish until either the New York close or until the price reached 1.2624. This was a great call as would have produced at least 45 pips of profit.
The price sold off quite sharply after this advance, changing the technical picture to one of consolidation albeit within a medium-term bullish trend. However, the consolidation is deep, so I think it is hard to say whether bulls or bears have the edge. Bulls might have a slight advantage. The action looks quite evenly balanced between the nearest support and resistance levels, so I would trade any bounces off these levels as reversals today.
There is nothing of high importance due today concerning the GBP. Regarding the USD, there will be a release of Unemployment Claims data at 1:30pm London time.