GBP/USD Forex Signal: Another Failure to Break 1.3900 – DailyForex.com

The UK CPI came in high at 2.5%.

Last Monday’s GBP/USD signals were not triggered as there was no bullish price action when the support level at 1.3876 was first reached that day.

Today’s GBP/USD Signals

Risk 0.75%.

Trades must be entered prior to 5pm London time today.

  • Put the stop loss 1 pip above the local swing high.

  • Adjust the stop loss to break even once the trade is 20 pips in profit.

  • Take off 50% of the position as profit when the price reaches 20 pips in profit and leave the remainder of the position to run.

Long Trade Ideas

  • Put the stop loss 1 pip below the local swing low.

  • Adjust the stop loss to break even once the trade is 20 pips in profit.

  • Take off 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.

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GBP/USD Analysis

I wrote last Monday that I thought there would probably not be a bullish breakout above the 1.3900 area, and the price would probably fall somewhat instead.

I saw the support level at 1.3831 as likely to be a good short trade profit target.

This was a great call as the price did fail again – twice – at 1.3900 quite precisely, then fell to reach 1.3831.

The picture now is more confused, with the price rising as we approach the London open following higher than expected UK CPI (inflation) data, which came in at 2.5% compared to the 2.2% which had been expected. There is key resistance at 1.3850 which looks like it will be hard to break, yet at the same time we have seen higher major lows and highs over the past two weeks, and there is also key support close to 1.3800.

So, I think we are likely to have very wide swings in the price, but the overall bias does seem to be towards the long side.

The technical picture will be more decisively bullish if the price can get established above 1.3900, or decisively bearish below 1.3700.

In the meantime, we are likely to see relatively high volatility and wide swings so this currency pair can be interesting to shorter-term traders.

GBP/USD

Regarding the USD, there will be a release of PPI data at 1:30pm London time, followed later by testimony before Congress by the Fed chair at 5pm. There is nothing of high importance scheduled today concerning the GBP.

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