GBP/USD: Support at 1.2411 still looks strong
Last Thursday’s signals were not triggered, as unfortunately the strong bullish rejection of the support level identified at 1.2411 did not happen until after London closed that day.
Today’s GBP/USD Signals
Risk 0.75% per trade.
Trades may only be taken between 8am and 5pm London time today.
Short Trade Idea
Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.2571.
Put the stop loss 1 pip above the local swing high.
Move the stop loss to break even once the trade is 25 pips in profit.
Take off 50% of the position as profit when the price reaches 25 pips in profit and leave the remainder of the position to run.
Long Trade Idea
Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of 1.2411.
Place the stop loss 1 pip below the local swing low.
Adjust the stop loss to break even once the trade is 25 pips in profit.
Remove 50% of the position as profit when the price reaches 25 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.
I wrote last Thursday that the price action looked quite evenly balanced between the nearest support and resistance levels, so I was prepared to trade any bounces off these levels as reversals. This was a good call as although the nearest support was broken, the support level below that at 1.2411 held up.
The price action is suddenly looking more bullish, as we are getting a bullish head and shoulders pattern beginning to form above 1.2411 as can be seen in the price chart below. However, it is doubtful that there will be much upside, but if the price can break with strong momentum above 1.2520, it could hit the next resistance at 1.2570 quite quickly.
I think it is likely that the price will reach 1.2520 during today’s London session, so I take a bullish bias at prices down to 1.2411.There is nothing of high importance due today concerning either the GBP or the USD.