My previous GBP/USD signal on 29th January was not triggered.
Today’s GBP/USD Signals
- Risk 0.75%.
- Trades must be taken prior to 5pm London time Thursday.
Long Trade Ideas
- Long entry following a bullish price action reversal on the H1 timeframe immediately upon the next touch of $1.3708, $1.3623, or $1.3591.
- 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.
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Short Trade Ideas
- Short entry following a bearish price action reversal on the H1 timeframe immediately upon the next touch of $1.3729, $1.3788, or $1.3852.
- 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.
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 last Thursday that I was going to take a bullish bias above $1.3852 or a bearish bias below $1.3747. I was more comfortable being bearish.
This was a good call although we didn’t get the bearish breakdown until the next trading day, Friday.
The technical picture now is showing that the US Dollar has started to weaken again, in line with its long-term bearish trend, following the strong counter-trend movement we saw over recent days.
Technically, today’s pivotal point looks likely to be $1.3729, with the price already threatening to break up above it as the London session gets underway.
I think we are likely to get this breakout, so if we quickly see two consecutive higher closes above that level, or a convincing bounce off that level following a retracement, then a long trade entry could be a good move. I think the price would then probably reach $1.3788 by the end of the day.
Another bullish factor is that the British Pound has been the strongest major currency so far today, although there is no obvious reason why.
There is nothing of high importance scheduled today regarding the GBP. Concerning the USD, there will be a release of ADP Non-Farm Employment Claims data at 1:15pm followed by ISM Services PMI at 3pm.
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