GBPUSD: Pound is still relatively weak
Last Thursday’s signals may have given a short trade as the price did pop below 1.2600 before retreating quickly, so any trade taken should have resulted in a very small loss or even at breakeven.
Today’s GBP/USD Signals
Risk 0.75% per trade.
Trades may be entered between 8am and 5pm London time today only.
Long entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of 1.2621.
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.
Take off 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 picture was still bearish, but it was starting to look as if the EUR/USD currency pair was looking more bearish than this one. Another thing which I saw as problematic here was the total lack of any key support or resistance levels nearby and somewhat choppy price action, which could make picking entries difficult.
This was a good call, as although the price broke lower, the bearishness did not hold. Turning to the picture now, technically in terms of support and resistance it is really a mess, with nothing except potential support at 1.2621. The real story in the market remains risk-off sentiment and USD weakness and this is what has caused the price to rise over recent hours rather than any true strength in the Pound. For this reason, I still see the best opportunities as likely to arise on the short side, but I do not see where it is likely to happen. For these reasons, I would stand aide from trading this pair today and wait for the chart to print a solid resistance level to work with.There is nothing important due today concerning the GBP. Regarding the USD, there will be a release of ISM Manufacturing PMI data at 3pm London time.