GBP/USD Forex Signal

GBPUSD: Choppy but buyers keep price above support at 1.2642

Yesterday’s signals were not triggered as there was no bullish price action at 1.2696.

Today’s GBP/USD Signals

Risk 0.75% per trade.

Trades may only be taken before 5pm London time today.

Long Trades 

• Go long following a bullish price action reversal on the H1 time frame time frame immediately upon the next touch of 1.2642.

• 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 Trades

• Go short following a bearish price action reversal on the H1 time frame time frame immediately upon the next touch of 1.2828.
• 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 20 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 yesterday that the price was still well within a relatively ranging and choppy area of price action, so the best I could say was that it maybe made sense to be weakly bullish over the medium-term, even though the long-term trend and arguably the U.K. economic fundamentals were looking relatively bearish.

This was a good call as the price is continuing to range above the support at 1.2642 and the fact that this level, which is the only nearby support and resistance level, continues to hold is significant. As such a long trade from a bounce there could be interesting, despite the long-term bearish trend here. Alternatively, if the price gets established below 1.2642, that would be a very bearish sign due to the prevailing bearish trend.

Over the short-term, the fact that we are seeing selling off the round number above at 1.2700 suggests that we are going to see lower prices over at least the first half of the London session.

There is nothing important due today concerning either the GBP or the USD.