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GBP/USD Forex Signal: Strong Bullish Breakout – DailyForex.com

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GBP/USD: Bearish inflection point at 1.2537

Yesterday’s signals were not triggered as there was no bearish price action when the price first hit the three identified resistance levels which were reached.

Today’s GBP/USD Signals

Risk 0.75% per trade.

Trades may only be taken before 5 pm 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 1.2613.
  • 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.
  • Remove 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 Ideas

  • Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of 1.2465, 1.2450, 1.2432, or 1.2406.
  • Put the stop loss 1 pip below the local swing low.
  • Move 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 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 yesterday that the price remained below crucial resistance at 1.2400 and was still within the bearish price channel, which continued to hold.

Therefore I thought that bears could have some success going short from a firm bearish reversal which may set up from a rejection of the resistance level at 1.2400, as this was confluent with the upper trend line of the long-term bearish price channel.

I also thought that a break above 1.2465 would be a big surprise and would definitely signal a considerably more bullish technical picture.

We got a strong bullish break above 1.2465 and the price at the time of writing is trading above the key psychological level at the round number of 1.2500. This was caused by improving risk sentiment which has boosted the formerly weak British Pound against the U.S. Dollar.

There are no key resistance levels below 1.2600 so the price has room to rise. However, bulls should beware the recent swing high at 1.2537.

The price looks likely to rise further today, so I am happy to take a long trade from any of the support levels below which are firmly rejected. However, I would wait until after the U.S. non-farm payroll data release later close to the New York open before entering any trade, as this can cause unpredictable price spikes.

GBP/USD

There is nothing of high importance scheduled today regarding the GBP. Concerning the USD, there will be a release of the Non-Farm Payrolls data at 1:30 pm London time.

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