My previous GBP/USD signal on 1st October was not triggered.
Today’s GBP/USD Signals
Risk 0.75%.
Trades must be taken prior to 5pm Tokyo time Friday.
Long Trade Ideas
- Long entry following a bullish price action reversal on the H1 timeframe immediately upon the next touch of $1.3123 or $1.3036.
- 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
- Short entry following a bearish price action reversal on the H1 timeframe immediately upon the next touch of $1.3247, 1.3326, or $1.3372.
- 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.
Top Forex Brokers
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.
GBP/USD Analysis
I wrote in my previous GBP/USD forecast on 1st October that I expected higher prices, but the area between $1.3488 and $1.3500 might prove to be resistant. I was really looking for a bounce below $1.3440 and then to enter a new long trade on any strong rebound.
This was a good call, especially with the price not lasting long above $1.3500 before falling back that day.
Nearly one month later, things are quite different – the British Pound has been the weakest of all major currencies this week, and over the past few days it has fallen fairly strongly to reach new 2-month low prices.
Despite that, in recent hours we saw a firm bounce from the supportive area, or at least just above it, at about $1.3150.
The US Dollar got a boost from a more hawkish than expected Federal Reserve at its policy meeting yesterday, when Fed Chair Powell made clear that a further rate cut of 0.25% in December is not a “forgone conclusion”. This has sent the greenback higher, which puts pressure on the price here.
The bullish recovery so far looks weak, and the price might well start falling again to retest the earlier low soon.
I still have faith in the trend, especially as the US Dollar is basically now in a long-term uptrend after bottoming out, so I would look here for a short trade from a bearish reversal at the nearest resistance level.
There is nothing of high importance scheduled regarding either the GBP or the USD.
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