GBP/USD Signal 04/09: How Much Upside To Expect (Chart)

(MENAFN- Daily Forex) Today's GBP/USD Signals

Long Trade Idea

• Long entry between $1.34242 and $1.34504, the intra-day low confirming the bullish price channel, and the intra-day high marking the mid-level of the bullish price channel.
• Place your stop-loss level 20 pips below your entry level.
• Adjust the stop-loss to break even once the trade is 50 pips in profit.
• Take off 50% of the position as profit when the price reaches 50 pips in profit and leave the remainder of the position to run.

Short Trade Idea

• Short entry if price action breaks out above $1.33851, ten pips below the intra-day high of the previous breakout that reversed into a breakdown.
• Place your stop-loss level 10 pips above your entry level.
• 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 Fundamental Analysis

Economic data worth considering:

• The UK has a light economic calendar, but budget worries will persist. A small data point is unlikely to move momentum, but economists expect the S&P Global Construction PMI to show a continuation of contraction in August.
• Today's US ADP report will capture the focus of traders, expected to show only 73K job creations in the private sector for August, down from July's low reading of 104K. Additional labor data includes initial jobless claims, the Challenger Job Cuts report, and second-quarter unit labor costs and non-farm productivity.
• The ISM Non-Manufacturing PMI for August could also move the US Dollar. Economists expect an increase from July's 50.1 to 50.9. Traders should also monitor the Prices Paid component. The S&P Global Services PMI and the S&P Global Composite PMI will also be released.
• July's US trade deficit is expected to widen to $77.7 billion from June's deficit of $60.2 billion.

So, why am I bullish on the GBP/USD following its massive sell-off?

My Tuesday prediction for a sell-off played out well. Price action has since recovered. The rise in bullish trading volumes has confirmed the breakout and momentum reversal. It also pushed the GBP/USD above its descending Fibonacci Retracement Fan.

The Bull Bear Power Indicator remained bullish for most of the reversal and continues to trade in bullish territory. Therefore, I expect the bullish price channel that formed following multiple breakouts to guide price action after an increase in trading volumes since the confirmation of the bullish price channel.

I will monitor price action for a breakdown but expect a re-test of its intra-day high of $1.34586. US economic data could exacerbate US Dollar weakness versus the British Pound today. Forex traders should earn 50 to 75 pips from this short position.

GBP/USD Price Chart

There is nothing of high importance due today regarding the British Pound. Concerning the US Dollar, there will be a release of the ADP Non-Farm Employment Change Forecast at 1:15pm London time, followed by the Unemployment Claims 15 minutes later, then ISM Services PMI at 3pm.

EURUSD Chart by TradingView

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