GBP/USD Forex Signal: Broadly Bearish on Strong Dollar – DailyForex.com

There are initial signs of support at 1.3588.

Last Wednesday’s GBP/USD signals were not triggered as there was no bearish price action when the identified resistance levels were first reached that day.

Today’s GBP/USD Signals

Risk 0.75%.

Trades may only be taken between 8am and 5pm London time today.

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

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

  • Remove 50% of the position as profit when the price reaches 20 pips in profit and leave the remainder of the position to ride.

Long Trade Ideas

  • Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of 1.3588, 1.3560, 1.3527, or 1.3502.

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

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

  • Remove 50% of the position as profit when the price reaches 20 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.

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GBP/USD Analysis

I wrote last Wednesday that I thought there would be very wide swings in the price, but the overall bias seemed to be towards the long side.

I was correct about the day, as the price rose over the course of Wednesday.

The technical picture has changed considerably since then, with the price finally breaking decisively below the 1.3750 which had acted as a floor for a while. The fall has been mainly driven by USD strength as the greenback broke to new multi-month high prices, but the British pound has also been one of the relatively weaker currencies as the UK is seeing so many people having to quarantine due to the resurgent coronavirus that there are fears it will cause economic disruption despite the high level of vaccination.

Although we have seen quite strong bearish momentum, there are initial signs that the support level at 1.3588 may hold, at least for a while. There is a cluster of support levels between there and the big round number at 1.3500, so even if 1.3588 does break down, it may be hard for the price to fall much further.

Despite the potential support, it is difficult to see the price rising by much today, so I think the most interesting approach to this currency pair today would be to look for a short trade from a bearish reversal at 1.3690.

GBP/USD

There is nothing of high importance due today regarding either the GBP or the USD.

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