(MENAFN- Daily Forex) Wednesday 12th January's GBP/USD signal was not triggered as the price never quite reached the support level at $1.3614 that day.Today's GBP/USD Signals
Risk 0.75%.
Trades must be taken between 8am and 5pm London time
- Long entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of $1.3490.
- 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
- Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of $1.3573 or $1.3602.
- 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.
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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I wrote two weeks ago that if there were no surprises in the UK CPI data release due that day then the bullishness should continue. I was looking for a long trade from a bullish bounce at $1.3614. This was a good call as although inflation came in slightly higher than expected, we saw a firm bullish move with a low just a few pips above $1.3614.
The price of this currency pair has been falling for a few days but found some support yesterday . This suggests a bullish reversal lasting a few days is possible but cannot really be called as we have the FOMC release later today after the London session ends, which could cause a firm directional movement in the US dollar in either direction.
The price is likely to not move strongly in either direction before the FOMC release, so it may be wisest to trade today's London session by looking for scalps off any bounces from key levels and then letting them run until they lose momentum. The most promising opportunity would seem to be a bullish bounce at the support level close by at $1.3490.
If the price can get established below $1.3490 during today's London session, it may well continue to fall to at least $1.3445.
Concerning the USD, there will be a release of the FOMC Statement and Federal Funds Rate at 7pm London time followed half an hour later by the usual press conference. There is nothing of high importance scheduled today concerning the GBP.
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