The British pound has weakened over recent days.
My GBP/USD signal last Monday produced a long trade entry from the bullish hourly pin bar which rejected the support level at $1.3079, but this only gave the minimum 25 pips profit before stopping out later.
Today’s GBP/USD Signals
Trades must be taken before 5pm London time today.
Long entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of $1.3000.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 time frame immediately upon the next touch of $1.3163 or $1.3236.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.
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.
I wrote last Monday that the price was starting to break down past the support level at $1.3152. Unless it snapped back above this level very quickly at the London open, it would be likely to fall further over today until it reached the next support level at $1.3079.
This was a great call as I was exactly right, giving the chance for both a profitable short trade to $1.3079 and a long trade from that level too over the same day.
The US Dollar has now begun to weaken after strengthening earlier this week, probably because better risk sentiment generated by peace talks between Russia and Ukraine is causing a small flow out of the US Dollar into riskier assets. This should tend to boost the price. However, the British Pound is not very strong right now due to concerns over poor British economic data, although the price may well rise somewhat, but I am not expecting a large or strong rise here in this currency pair.
The technical picture is showing a choppy consolidation between $1.3050 and $1.3150, although the nearest key support and resistance levels are further away. It is possible that the price will rise slightly over today but never reach a key level.
The most interesting feature on today’s chart is the support at the big psychological round number of $1.3000. The price is very unlikely to hit this level, but if it did and bounced, it could provide a great medium to long-term long trade entry.
Technically, if the price hits $1.3163 and makes a bearish reversal, it would make an attractive short trade entry, so I will take this trade if it sets up.
Regarding the USD, there will be a release of the ADP Non-Farm Employment change forecast at 1:15pm London time, and Final GDP data 15 minutes later. There is nothing of high importance scheduled for today concerning the USD.