Last Wednesday’s GBP/USD signal may have produced a profitable short-term short trade from the bearish reversal that day at the resistance level identified at $1.3587.
Today’s GBP/USD Signals
Risk 0.75%.
Trades must be taken between 8am and 5pm London time today only.
Long Trade Ideas
- Long entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of $1.3458 or $1.3401.
- 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.
- Take off 50% of the position as profit when the price reaches 25 pips in profit and leave the remainder of the position to run.
Short Trade Idea
- Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of $1.3664.
- 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.
- Take off 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 Wednesday that the range between $1.3458 and $1.3587 was very likely to hold over the day, so I was only interested in trading reversals off the extremes at $1.3458 or $1.3587.
This was a good call, as the range held, with a bearish reversal forming at $1.3587 which could have produced a profitable short trade.
The technical picture has changed little over the past week, as the US dollar moved by very little. The former resistance level at $1.3587 has been invalidated, so I now see the price as consolidating still within a very wide range, but with the limits bounded at $1.3458 and $1.3664. Despite this upwards adjustment, the consolidation looks more bearish than bullish due to the selling pressure which shows whenever the price nears $1.3650, so I think an eventual breakdown below $1.3458 will be more likely to happen than a bullish breakout above $1.3664.
It is very likely that these two key levels will hold firm over today’s session so I am happy trading reversals from either.
There is nothing of high importance scheduled for today concerning either the GBP or the USD.