GBP/USD Forex Signal: Weak Recovery – DailyForex.com

I think it is quite likely today that the price will remain between 1.3810 and 1.3746.

Last Wednesday’s GBP/USD signals were not triggered, as none of the key support or resistance levels identified were reached that day.

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 1.3810 or the broken ascending trend line shown in the price chart below which is currently sitting at about 1.3850.

  • 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 1.3746 or 1.3725.

  • 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 it looked looking likely that the price would continue to fall to at least 1.3653 and it may even reach as low as 1.3617. This was due to the widespread strength in the USD and the relative short-term weakness of the British pound.

I was correct only insofar as Wednesday was a down day, but the price never got as low as 1.3653 before turning around and putting in a bottom at 1.3673 which has held until now.

We are seeing a continuing weak recovery in the price, helped by new support levels established at 1.3725 and 1.3746. The price is currently rising quite firmly over the first hour of the London session and approaching what looks to be a pivotal resistance level at 1.3810.

I think it is quite likely today that the price will remain between 1.3810 and 1.3746.

If the price does get established above 1.3810 that will be a mildly bullish sign, but the price would still face the broken trend line at about 1.3850 which could act as firm resistance.

I am ready to enter a short-term long trade from a bullish bounce at 1.3746 or a short trade from a bearish reversal at 1.3810 or 1.3850.

GBP/USD

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

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