My previous GBP/USD signal on 16th December gave a losing long trade.
Today’s GBP/USD Signals
Risk 0.75%.
Trades may only be entered before 5pm Tokyo time Tuesday.
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Long Trade Ideas
- Long entry following a bullish price action reversal on the H1 timeframe immediately upon the next touch of $1.3473, $1.3447, or $1.3428.
- Place the stop loss 1 pip below the local swing low.
- Move 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 Ideas
- Short entry following a bearish price action reversal on the H1 timeframe immediately upon the next touch of $1.3534, $1.3561, or $1.3587.
- Place the stop loss 1 pip above the local swing high.
- Move 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 two weeks ago that the support level at $1.3348 looked likely to be strong.
This level was not reached that day, but the primary move over the London session was bullish and strong, so I was correct about directional bias.
This currency pair has made some gains over the past two weeks, but for a few days now has been in a flat consolidation. As the dominant trend is bullish, you might call it a bullish consolidation.
I think trades from reversals at either $1.3473 or $1.3534 make sense, but more so a long trade due to the longer-term trend and the generally weak US Dollar.
Liquidity might be low today so price movements could be slippery.
There is nothing of high importance scheduled today regarding either the GBP or the USD.
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