GBP/USD Forex Signal: Pivotal Resistance at 1.3793 – DailyForex.com

The British pound remains weaker than the euro.

Last Monday’s GBP/USD signals produced a profitable short trade from the bearish doji candlestick on the hourly price chart which rejected the key resistance level identified at 1.3773.

Today’s GBP/USD Signals

Risk 0.75%.

Trades must be taken before 5pm London time today.

Short Trade Ideas

  • Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.3793 or 1.3867.

  • 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

  • Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of 1.3714 or 1.3693.

  • 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 the support at 1.3653 marked a long-term low and so was likely to be very pivotal – I was looking for either a long trade there, or a short following a bearish breakdown below this level, which I preferred.

As it happened, the price went sideways Monday and the support level at 1.3653 was not even reached.

The Forex market is currently dominated by new weakness in the U.S. dollar, which is falling against practically every currency. The British pound is not one of the stronger major currencies right now, but this dollar weakness is enough to push the price up.

Technically, we see a zone of support around 1.3700. The price has some short-term bullish momentum and looks likely to test the resistance level at 1.3793 which will probably be today’s pivotal point.

I am prepared to take a short trade following a strong bearish reversal at 1.3793, which ideally would reject 1.3800 at the same time. Alternatively, if the price can get established above 1.3800, that would be a bullish sign and suggest a further rise to 1.3867 over the short term.

GBP/USD

Concerning the USD, the Chair of the Federal Reserve will be giving a minor speech at 5pm London time. There is nothing of high importance due today regarding the GBP.

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