My previous GBP/USD signal on 10th October was not triggered as none of the key support or resistance levels I had identified were reached that day.
Today’s GBP/USD Signals
- Risk 0.75%.
- Trades may only be entered before 5pm London time Thursday.
Top Regulated Brokers
Long Trade Ideas
- Make a long entry following a bullish price action reversal on the 1H1 time frame H1H1H1 timeframe immediately upon the next touch of $1.2919, $1.2869, $1.2813, or $1.2785.
- 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 ride.
Short Trade Idea
- Make a short entry following a bearish price action reversal on the 1H1 time frame H1H1H1 timeframe immediately upon the next touch of $1.2958, $1.2977, $1.3019, $1.3035, or $1.3060.
- 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 ride.
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 almost one month ago that the technical picture suggested that the price looked likely to make some kind of bullish bounce from this zone between $1.3000 and $1.3050. This was a good call as we did see a bullish bounce from that area which gave some profit on the day.
The technical picture now is confused. We saw a big swing down as the US Dollar strengthened following the Trump/Republican victory in the US elections on Tuesday, and we are now seeing a recovery in the price which is equally as strong. Markets are pricing in much higher US interest rate yields going forward now, but this is not translating today into meaningful gains in the US Dollar – in the fact, the greenback is declining firmly.
What is happening, is that markets are now turning attention to the policy meetings which will be held today by both central banks. Each bank is strongly expected to cut its interest rate by 0.25%, so it is in the voting on the cut and in the Statements where markets will be taking their cues from.
We are likely to see further strong swings today, but in which direction is very unknowable. There are also many key support and resistance levels nearby.
One strategy that can work on a day like today is to place limit orders at the price extremes of the chart, say three or four support or resistance levels away, and hope that the central bank policy releases create a spike that can be quickly entered and closed out at profit.
For traders not wanting to use this kind of trading style, it will probably be wise to sit today and wait to digest the releases by both central banks.
Concerning the GBP, the Bank of England will be meeting at Noon London time to release its Official Bank Rate, Votes, Monetary Policy Summary, and Report. Regarding the USD, at 7pm London time the Federal Reserve will be releasing its Federal Funds Rate and Statement.
Ready to trade our daily Forex signals? Here is our list of the best Forex brokers for beginners worth checking out.