Finding support at $1.2629.
My previous GBP/USD signal on 18th April was not triggered as none of the key support or resistance levels were reached during the day’s London session.
Risk 0.75%.
Trades may only be entered between 8am and 5pm London time today.
- Go long following a bullish price action reversal on the H1 timeframe immediately upon the next touch of $1.2629, $1.2533, or $1.2493.
- Put 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.
- 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.
- Go short following a bearish price action reversal on the H1 timeframe immediately upon the next touch of $1.2698, $1.2726, or $1.2772.
- Put the stop loss 1 pip above the local swing high.
- Adjust 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.
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 in my previous forecast for the GBP/USD currency pair on 18th April that the technical picture looked bearish but as we had a bounce near the support level at $1.2435 which looked likely to be strong, I expected an up day. This was a good call as the price did rise over the day, but it never reached the identified support level.
The technical picture now is much more bullish, I would even say quite strongly bullish, with the British Pound has risen against the Dollar now for many consecutive weeks and showing no sign of stopping, as it now stands just a few pips below a fresh 1-year high price. There is clear bullish momentum here and it is notable that the Pound is advancing more strongly than the Euro is.
We have a strong long-term bullish trend in the Pound and later this week the Bank of England is expected to hike its interest rate by 0.25%. If the Bank does not make this hike the price of this currency pair could fall hard. Yet this is unlikely and there are signs that the US Dollar is really to begin falling with stronger momentum as it is close to trading in blue sky as it breaks below recent bullish inflection points.
The price has plenty of room to rise to the $1.2700 area and a good signal for day traders will probably be a long trade entry if we get two consecutive higher hourly closes above $1.2650 which seems to be acting as minor resistance. Of course, the price by that time should not be too close to $1.2700, which is an obvious take-profit level – in fact, a few pips below that round number would be better.
Note that London is on holiday today so trading and liquidity are going to be a very thing until New York comes online later.
There is nothing of high importance due concerning either the GBP or the USD. It is a public holiday today in the UK.
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