GBP/USD Forex Signal: Resistance Zone Below 1.3900 – DailyForex.com

Volatility is relatively healthy in this currency pair, so it may be a good choice for day traders today.

Last Wednesday’s GBP/USD signals were not triggered, as the bearish price action took place just above the key resistance level identified at 1.3793.

Today’s GBP/USD Signals

Risk 0.75%.

Trades may only be entered between 8am and 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 1.3867 or 1.3889.

  • 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 1.3803 or 1.3714.

  • 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 situation was dominated by a zone of support around 1.3700. The price had some short-term bullish momentum and looked likely to test the resistance level at 1.3793, which I thought would probably be the day’s pivotal point.

This was an OK call, although in fact the level was more like 1.3800, as the price was held under this level and consolidated slightly below 1.3800 over the day.

There is no long-term trend, but as we head towards the end of the first Asian session of this week, we are seeing some bullish momentum in the pound over the short term as it gains against the greenback. Bulls are pushing up the price, which looks very likely to shortly test the resistance level identified at 1.3867 and 1.3889 just a little way above.

If the price can get established above 1.3900, that will be a bullish sign, as the price would then have room to rise all the way, potentially, to the big round number at 1.4000 where there is also a key resistance level. Alternatively, if the price fails to rise and makes a bearish reversal anywhere between 1.3867 and 1.3900, that would be a bearish sign and suggest a short trade entry.

Volatility is relatively healthy in this currency pair, so it may be a good choice for day traders today.

GBP/USD

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

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