GBP/USD Forex Signal: Uncertain Price Movement – DailyForex.com

The opportunity that truly stands out in the chart here would be a short trade from a bearish reversal at 1.3810.

Last Monday’s GBP/USD signals produced a nicely profitable short trade from the bearish reversal which took place at the confluence of the broken ascending trend line and the half number at 1.3850.

Today’s GBP/USD Signals

Risk 0.75%.

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

Short Trade Ideas

  • Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.3746 or 1.3810.

  • 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 1.3707, 1.3653, or 1.3617.

  • 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 it was likely that the price would remain between 1.3810 and 1.3746.

The price in fact popped above the upper boundary at 1.3810 but then made a bearish reversal from 1.3850 where I had said I would be prepared to take a short trade, so that was a good call even though I was wrong about the upper limit of the range.

The technical picture is bearish over the medium term with the price chart below dominated by a descending trend line. However, we cannot draw any kind of bearish channel and the formation is showing some bottoming out, so although the U.S. dollar is very strong, the pound is not one of the weakest currencies because it is not falling here against the dollar the way other currencies such as the Japanese yen and euro are.

The price is currently ranging narrowly between 1.3707 and 1.3746. The most attractive potential set up within that range would be a short from a bearish reversal from 1.3746, but the opportunity that truly stands out in the chart here would be a short trade from a bearish reversal at 1.3810.

There are high-impact data releases due today concerning both currencies, so if either of the releases detailed below push the price to one of those levels followed by a reversal, that would strengthen the possibility of a successful trade.

GBP/USD

Regarding the GBP, there will be a release of Final GDP data at 9:30am London time. Concerning the USD, there will be a release of the ADP Non-Farm Employment Payrolls forecast at 1:15pm.

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