Dollar weakness is pushing the price up.
Last Wednesday’s GBP/USD signal was not triggered as there was no bullish price action when the price first reached $1.3219.
Today’s GBP/USD Signals
Risk 0.75%.
Trades may only be entered before 5pm London time today.
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Long entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of $1.3340, $1.3304, or $1.3273.
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Place the stop loss 1 pip below the local swing low.
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Move the stop loss to break even once the trade is 25 pips in profit.
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Remove 50% of the position as profit when the price reaches 25 pips in profit and leave the remainder of the position to ride.
Short Trade Idea
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Place the stop loss 1 pip above the local swing high.
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Move the stop loss to break even once the trade is 25 pips in profit.
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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.
GBP/USD Analysis
I wrote on Wednesday last week that the price was likely to be consolidative over the day but could spike to either of the extreme levels at $1.3141 or $1.3310 soon after the British inflation data release, with true price direction only likely to emerge following an hour or so after the later FOMC release.
This was a good call, as although the UK inflation data release did not do very much to the price, the true directional move was indeed revealed one hour after the FOMC by the large bullish candlestick rejecting the lows, which then produced further bullish movement of approximately 35 pips over the next half day or so.
The technical picture is now considerably more bullish despite the still-valid long-term bearish trend. The price has broken above several former resistance levels and has notably got established above $1.3340. If the price continues to hold up above this level, it is likely to make a further advance today.
The short-term bullishness is due to US dollar weakness after the US Dollar Index again rejected key resistance yesterday and began to fall decisively. There is not any notable strength in the British pound, it is all about dollar weakness right now. It may be that the initial good news on omicron morbidity could boost the pound if it is supported by further data soon.
I will take a bullish bias if we get a large bullish candlestick early in the London session which rejects the support level at $1.3340.
Concerning the USD, there will be a release of Core PCE Price Index data at 1:30pm London time. There is nothing of high importance scheduled for today regarding the GBP.
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