GBP/USD Forex Signal Today 20/01: Strongly Bullish (Chart)

(MENAFN- Daily Forex) My previous GBP/USD signal on 13th January gave a profitable short trade from the resistance level at $1.3486.

Today's GBP/USD Signals

Risk 0.75%.

Trades must be taken prior to 5pm London time Wednesday Trade Ideas

• Go long following a bullish price action reversal on the H1 timeframe immediately upon the next touch of $1.3432, $1.3402, or $1.3332.
• 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.
• 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

• Go short following a bearish price action reversal on the H1 timeframe immediately upon the next touch of $1.3486, $1.3503, or $1.3531.
• 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.
• Remove 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 one week ago that I saw the price as likely to range, so I saw the best approach as trading reversals from range extremes.

As it turned out, this was not such a great call, as taking a more basically bearish approach would have worked out better over the day.

The technical picture is a bit strange right now as we are seeing very strong gains here this week, which technically did not look likely to happen. This is because markets are not so much paying attention to technical factors right now but are looking more at unusual geopolitical factors such as a potential EU/US trade/tariff war over Greenland, plus the risk of a major war erupting between the US and Iran.

The result of this is a very strong British Pound and a relatively weak US Dollar, and this is pushing the price higher. However, the price is now running into resistance, but we cannot rely on technical factors to drive prices right now – geopolitical developments will be more important. This can make trading hazardous.

EURUSD Chart by TradingView

Still, it might be possible to win one or two short scalps from resistance levels which are confluent with the big round number at $1.3500, but keep an eye on the news, especially anything involving President Trump, tariffs, or Greenland.

There is nothing of high importance scheduled today regarding either the GBP or the USD.

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