(MENAFN- Daily Forex) Last Wednesday’s GBP/USD signals were not triggered as none of the key support or resistance levels identified were reached that day.
Today’s GBP/USD Signals
Risk 0.75%.
Trades may only be entered prior to 5pm London time
- Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.3934 or 1.4010.
- Put the stop loss 1 pip above the local swing high.
- Adjust the stop loss to break even once the trade is 20 pips in profit.
- Take off 50% of the position as profit when the price reaches 20 pips in profit and leave the remainder of the position to run.
Long Trade Ideas
- Long entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of 1.3834 or 1.3767.
- Put the stop loss 1 pip below the local swing low.
- Adjust the stop loss to break even once the trade is 20 pips in profit.
- Take off 50% of the position as profit when the price reaches 20 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.
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GBP/USD Analysis
I wrote last Wednesday that although the price had been rising strongly, it now seemed to be selling off from 1.3900 which I saw as a very pivotal point. I was ready to either take a short trade from another failure there, or to take a bullish bias following two consecutive hourly closes above that level during the day’s London session.
As it happened, 1.3900 was no reached until after the London session closed but entering long on the second hourly close above that level at that time could have resulted in about 75 pips profit by the next day, so I was on the right track with this call.
The price has fallen back below the closest obvious horizontal resistance level which is a short-term bearish sign. However, the price is above its levels from both 3 and 6 months ago suggesting that we have a valid long-term bullish trend. There are initial signs at the time of writing during the Asian session that we are again seeing a short-term bullish turn , which may send the price up to test 1.3934 as we head into the London open.
I prefer to only look for a long trade today, but I will only enter a trade in this currency pair following a bullish bounce after a retracement to the nearest key support level at 1.3834.
If the price can get established above 1.4010, that would be a bullish sign. I see that level as extremely key resistance due to its confluence with the big psychological round number at 1.4000.
Concerning the USD, there will be a release of ISM Manufacturing PMI data at 3pm London time. There is nothing of high importance scheduled for today concerning the GBP.
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