GBP/USD: New lower resistance at 1.2314
Yesterday’s signals were not triggered as there was no bullish price action when the support level at 1.2285 was reached.
Today’s GBP/USD Signals
Risk 0.75% per trade.
Trades may only be taken prior to 5pm London time today.
Short Trade Ideas
Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.2314 or 1.2281.
Put the stop loss 1 pip above the local swing high.
Move 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 Trade Ideas
Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of 1.2208 or 1.2139.
Put the stop loss 1 pip below the local swing low.
Move 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 yesterday that the price may find support for a while at either of the support levels identified below the current price, but there were good reasons to be looking for short trades only in this currency pair.
This was a good call as the price has continued to fall predictably to new lows, forming a new lower logical stairstep resistance level at 1.2314.
The British Pound is weak, and we have a well-established and symmetrical bearish price channel. In the absence of any major scheduled news releases today, I see no reason to be looking for anything other than short trades in this currency pair today, even though the U.S. Dollar is not the strongest currency.
There is nothing of high importance scheduled today regarding the GBP. Concerning the USD, the Chair of the Federal Reserve will be testifying before the House of Representatives at 5:30pm London time.