My previous GBP/USD signal last Wednesday was not triggered.
Today’s GBP/USD Signals
Long Trade Ideas
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Long entry following a bullish price action reversal on the H1 timeframe immediately upon the next touch of $1.3362, $1.3310, or $1.3268.
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Place the stop loss 1 pip below the local swing low.
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Move the stop loss to break even once the trade is 25 pips in profit.
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Take off 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
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Short entry following a bearish price action reversal on the H1 timeframe immediately upon the next touch of $1.3396, $1.3455, or $1.3477.
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Place the stop loss 1 pip above the local swing high.
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Move the stop loss to break even once the trade is 25 pips in profit.
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Take off 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.
I wrote in my previous GBP/USD forecast last Wednesday that I thought the best chance of a good trade would be a long trade above $1.3372. I was correct to see this level as pivotal although the real point was a few pips higher, as the price struggled to get above this area that day but kept failing and eventually headed lower.
I am taking a bearish bias on this currency pair now as the price is being contained within a medium-term descending linear regression analysis price channel, which is shown within the price chart below.
The problem with trading this currency pair short is that although the general trend seems predictable, the price action is choppy. This is partly because markets are dominated by the war in the Middle East and are being heavily influenced by opaque decision making. Yesterday we got US CPI (inflation) data which had little effect as it was exactly as expected.
I think the best opportunities would be either a short trade from $1.3396 as it might be the shoulder of a bearish head and shoulders chart pattern and is also confluent with the round number at $1.3400.
There could also be an opportunity to go short from a bearish reversal at $1.3455.
On the long side, the support level at $1.3362 looks strong, and if there is a bounce here later in the day, it would produce a bullish “square root” chart pattern which would indicate a move higher.
There is nothing of high importance scheduled today regarding the GBP. Concerning the USD, there will be a release of Unemployment Claims data at 12:30pm London time.
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