My previous GBP/USD signal last Thursday did not set up.
Today’s GBP/USD Signals
Risk 0.75%.
Trades may only be entered before 5pm Tokyo time Thursday.
Long Trade Ideas
- Long entry following a bullish price action reversal on the H1 timeframe immediately upon the next touch of $1.3519, $1.3487, or $1.3456.
- 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 Ideas
- Short entry following a bearish price action reversal on the H1 timeframe immediately upon the next touch of $1.3559, 1.3587, or $1.3620.
- 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.
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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 in my previous GBP/USD forecast last Thursday that I was bearish and looking for a short trade from the late Asian session’s bearish inflection point. This was not very useful as the price did not get back to this area during the day’s London session.
The technical picture has become quite bearish as the US Dollar declines and stocks rise on increased optimism since the end of last week that the US Federal Reserve will start cutting rates more aggressively, with at least 0.75% of cuts expected over the rest of 2025. The British Pound is not especially strong, it is just rising related to the US Dollar like most other currencies.
Technically, we can see the current bullish trend has been in force for some days, with the price just making a u-shaped bottom at a new supportive area between about $1.3519 and the big round number at $1.3500. This should be today’s pivotal area, so as long as the price remains above $1.3519 or even $1.3500 it will make sense to remain bullish.
The wild card is today’s US PI (inflation) data release, which will come not long after New York opens. It could either produce sideways volatility or a strong bullish move if below 0.3% month-on-month or bearish if above it. So, keep this data release in mind if you have any open trades as that moment approaches.
There is nothing of high importance scheduled regarding the GBP today. Concerning the USD, there will be a release of CPI (inflation) data at 1:30pm London time.
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