Selling pressure whenever price nears $1.3650.
My last GBP/USD signal on 14th February was not triggered, as none of the key support or resistance levels which I identified were reached.
Today’s GBP/USD Signals
Risk 0.75%.
Trades may only be entered before 5pm London time today.
Long Trade Ideas
- Go long following a bullish price action reversal on the H1 timeframe immediately upon the next touch of $1.3388 or $1.3273.
- Place 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 ride.
Short Trade Idea
- Go short following a bearish price action reversal on the H1 timeframe immediately upon the next touch of $1.3458.
- Place 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 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 two weeks ago that the price was likely to consolidate between $1.3458 and $1.3664 over the near term but would then probably breakdown below $1.3458 before breaking above $1.3664.
This was a good and accurate call, as the breakdown below $1.3458 finally happened about ten days later.
Market sentiment remains dominated by the issue of the Russian invasion of Ukraine while NATO sends arms to the state of Ukraine, meaning that we are effectively going to see a proxy war between NATO and Russia which poses some risk of escalation into a direct confrontation. More short-term concerns include the impact of the sanctions against Russia on the economies of the EU nations as well as the UK. In this time of crisis, the US Dollar is tending to do well, while the Pound is likely to be weak. So fundamental factors are probably going to favour bears on this currency pair.
Technically, we see the price slowly clawing back some of the sharp losses made last Thursday as news of the Russian invasion broke, but so far, the bullish move is slow and weak and has made up not even half of the loss, so the bulls do not look very convincing. The price is not far from a resistance level at $1.3458, and I think a bearish reversal there if it sets up would be an excellent signal for a short trade.
Concerning the USD, there will be a release of ISM Manufacturing PMI data at 3pm London time. There is nothing of high importance scheduled today concerning the GBP.
Source link
