My previous GBP/USD signal on 19th February was not triggered, as there was no bullish price action when the support level at $1.2572 was first reached.
Today’s GBP/USD Signals
Risk 0.75%.
Trades must be entered prior to 5pm London time today.
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Long Trade Ideas
- Go long following a bullish price action reversal on the H1 timeframe immediately upon the next touch of $1.2621, $1.2598, or $1.2566.
- 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
- Go short following a bearish price action reversal on the H1 timeframe immediately upon the next touch of $1.2686, $1.2719, or $1.2734.
- 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.
GBP/USD Analysis
I wrote in my previous GBP/USD forecast last Wednesday that the price was looking bullish, and I thought that the support level at $1.2572 looked strong.
I was not far off, but unfortunately the low of the day was a few pips below $1.2572.
The medium-term bullish trend has continued, with markets quite bullish on the Pound as inflation and consumer demand in the UK prove stubbornly high, as the USD continues to sell off despite bullish fundamentals and a hawkish approach from the Fed (or at least a “wait and see” approach). The price chart below shows that the price has continued to advance to new highs quite steadily over recent days.
The price reversed a few hours ago at the nearest resistance level of $1.2686 and is now quite close to the support level at $1.2621.
I think if that support holds, there could be another opportunity to go long here, ideally from a bounce off $1.2621.
A stronger long entry could be once the price makes a bullish breakout beyond $1.2686 to a new high – breakout trades tend to work better in this currency pair than buying dips.
There is nothing of high importance due today regarding either the GBP or the USD.
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