GBP/USD Forex Signal: Bullish Above 1.3810 – DailyForex.com

The British pound is proving itself to be a relatively strong currency.

Last Wednesday’s GBP/USD signals were not triggered as the bearish price action which occurred when the price reached the resistance level identified at 1.3810 did not happen until after the London close.

Today’s GBP/USD Signals

Risk 0.75%.

Trades may only be entered prior to 5pm London time today.

Short Trade Ideas

  • Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of the broken ascending trend line shown in the price chart below which is currently sitting at approximately 1.3870 or 1.3893.

  • 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

  • Long entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of 1.3810 or 1.3746.

  • 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 the technical picture was one of weak and uncertain bearishness with the price ranging narrowly between 1.3707 and 1.3746. The most attractive potential set up I saw within that range was a short from a bearish reversal from 1.3746 or (even better) at 1.3810.

I was correct about the bearish opportunity coming at 1.3810, but this reversal did not happen until after the London close, which is a shame as the bearish turn there have about 50 pips or so of profit on the short side if taken.

The picture is now more bullish, with the British pound one of the strongest major currencies. We are seeing some convincing bullish movements and most impressive of all in this direction has been the new stairstep support established at 1.3810. This level looks like it is going to hold and act as a springboard so I will be happy to take a long trade if we see another bullish bounce there today and I think this level is likely to be today’s best opportunity for a trade entry as well as the day’s crucial pivotal point.

Above the current price is a broken ascending trend line which will probably be the next test for bulls here. We may see a bearish reversal there but if the price gets established above it then it will likely go on to challenge the round number at 1.3900.

GBP/USD

Concerning the USD, there will be a release of ISM Services data at 3pm London time. There is nothing of high importance due today regarding the GBP as it is a public holiday in the U.K. today.

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