GBP/USD Forex Signal Today 11/02: Bearish Channel (Chart)

(MENAFN- Daily Forex) My previous GBP/USD signal last Tuesday was not triggered, as there was no bearish price action when the resistance level at $1.2471 was first reached.

Today's GBP/USD Signals

Risk 0.75%.

Trades must be entered prior to 5pm London time today only Trade Ideas

• Go long following a bullish price action reversal on the H1 timeframe immediately upon the next touch of $1.2335, $1.2289, or $1.2279.

• 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 timeframe immediately upon the next touch of $1.2372, $1.2420, or $1.2471.

• 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.

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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/USD Analysis

I wrote in my previous GBP/USD forecast exactly one week ago that the price was likely to remain contained between $1.2376 and $1.2471.

This was not an accurate call, although the low of the day was very close to the nearest support level at $1.2376.

The technical picture has become more bearish now. The price chart below shows that the price has been mostly contained within a symmetrical descending price channel for almost an entire week. This medium to short-term bearish trend has got legs due to the strengthening US Dollar which gets a tailwind from the new tariffs President Trump is either threatening to impose or actually imposing (notably the new 25% tariffs on steel and aluminium that were announced yesterday).

The British Pound is not one of the weakest currencies, but the UK economy is not in great shape with both it and the new government facing some strong challenges. This helps to weaken the Pound.

So, the first thing to watch for today is whether the price can break down below the support level at $1.2335. As London opened, we saw a bullish bounce off that level. If this holds up the price will likely rise at least a bit further. If the price breaks below support be cautious for another 10 or 15 pips below that, and then if that is taken out, the price should be able to head to the next support level at $1.2289.

The picture had become more bearish, so I was looking for a short trade from a reversal at $1.2471. This level was not reached that day, but the price did fall over the near term, so my approach was correct.

The technical picture is a bit choppy but also, we see low volatility, despite all the tariff-related turmoil in the Forex market. This has affected the Canadian Dollar and emerging currencies such as the Mexican Peso, leaving this currency pair quite untouched.

Technically, it seems as if the support level just below at $1.2376 could be quite solid, but there is no short-term momentum, and the price is equally far away from the nearest resistance level at $1.2471.

I think the price is likely to remain contained between these two levels over today's London and New York sessions, so scalping reversals off either level is likely to be the best strategy if you must trade this currency pair. However, there will likely be better opportunities elsewhere in the Forex market, possibly in the EUR/USD currency pair.

Concerning the GBP, the Governor of the Bank of England will be giving a minor speech at 12:15pm London time. Regarding the USD, Chair of the Federal Reserve will be testifying before the Senate on monetary policy at 3pm.

EURUSD Chart by TradingView

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