My previous GBP/USD signal last Thursday gave a profitable short trade from the bearish rejection of the resistance level at $1.3549.
Today’s GBP/USD Signals
Long Trade Ideas
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Go long following a bullish price action reversal on the H1 timeframe immediately upon the next touch of $1.3268, $1.3221, or $1.3153.
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Put the stop loss 1 pip below the local swing low.
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Adjust the stop loss to break even once the trade is 25 pips in profit.
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Remove 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
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Go short following a bearish price action reversal on the H1 timeframe immediately upon the next touch of $1.3372, $1.3504, or $1.3536.
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Put the stop loss 1 pip above the local swing high.
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Adjust the stop loss to break even once the trade is 25 pips in profit.
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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.
I wrote in my previous GBP/USD forecast last Thursday that I thought the best chance of a good trade would be a continued fall to $1.3504 and a bullish bounce which would ideally also reject the round number at $1.3500 at the same time, and this would be a long trade.
The price was not held up by that support, so it was not an accurate or useful call, although it was enough to keep you out of trouble.
The technical picture now is seeing the threat of a bullish breakout, with the horizontal level at $1.3372 looking pivotal for three reasons:
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It is a clear stairstep horizontal level which has also just acted as resistance this morning.
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It is confluent with the top of the linear regression price channel analysis which is shown within the price chart below.
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We have seen a clear first higher low, which can also be a leading early signal of a trend change from bearish to bullish.
It may be possible to go long if the price can get established above $1.3372, as the price would then have room to rise all the way to $1.3500 without reaching any more key resistance levels.
Alternatively, a short from another failure to break above $1.3372 could be possibly, although I think any downwards move would be unpredictable and choppy.
I prefer a long trade above $1.3372.
There is nothing of high importance scheduled today regarding the GBP. Concerning the USD, there will be a release of ADP Non-Farm Employment Change data at 1:15pm London time, followed by ISM Services PMI at 3pm..
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