My previous GBP/USD signal on 10th September produced a profitable long trade from the bullish bounce off the support level which I had identified at $1.3519, with a natural take profit signal from the bearish reversal at $1.3559.
Today’s GBP/USD Signals
Risk 0.75%.
Trades must be taken prior to 5pm Tokyo time Thursday.
Long Trade Ideas
- Go long following a bullish price action reversal on the 1H1 time frame H1H1H1 timeframe immediately upon the next touch of $1.3413, $1.3386, or $1.3371.
- Place 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 ride.
Short Trade Ideas
- Go short following a bearish price action reversal on the 1H1 time frame H1H1H1 timeframe immediately upon the next touch of $1.3488, 1.3534, or $1.3561.
- Place 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 ride.
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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 on 10th September that I was bullish and the big round number at $1.3500 or even $1.3519 would be pivotal – if the price kept above this area, I expected it to continue rising.
This was an accurate and profitable call, enabling a winning long trade to be taken with confidence.
More than three weeks later, and although the price is still within a similar area, the technical picture is again looking bullish. The price chart below shows strong buying above the $1.3400 area up to about $1.3440, and the price is rising from there and is already not far from the next area of resistance.
I expect higher prices, but the area between $1.3488 and $1.3500 might provide to be resistant today.
I would not want to take a short trade even if the $1.3500 area is pivotal. I think it will be best here to hope for another dip into the area below $1.3440 and then to enter a new long trade on any strong rebound, maybe starting the trade as a scalp.
There is nothing of high importance scheduled regarding the GBP today. Concerning the USD, there will be a release of the ADP Non-Farm Employment Forecast at 1:15pm London time, followed by ISM Manufacturing PMI at 3pm.
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