GBP/USD Forex Signal

Adam Lemon DailyForex.com

Yesterday’s signals produced a long trade entry following the bullish engulfing candlestick which rejected the support level at 1.3456. This trade would still be open and in profit but as the price is currently testing the new higher support at 1.3527, it will probably be wise to move the stop loss to break even now on any part of the trade still open.

Today’s GBP/USD Signals

Risk 0.75% per trade.

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

Short Trade

Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.3601.
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.

Long Trade

Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of 1.3456.
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.

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 I saw that the next test which would tell us something about this currency pair should come when the price reaches 1.3527. If there was a clear and strong bearish reversal there, things may become more clearly bearish. The price in fact easily broke strongly above the level, before falling back. The level may now become support, but it looks weak. So overall, there is no likely change to the technical picture, which is a wide-ranging consolidation pattern between about 1.3450 and 1.3600. Best results are likely to come today from trading any reversals at those extremes which might occur. I have no directional bias.

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

Author

Adam Lemon

DailyForex.com

Adam is a Forex trader who has worked within financial markets for over 12 years, including 6 years with Merrill Lynch. He is certified in Fund Management and Investment Management by the U.K. Chartered Institute for Securities & Investment.

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