Support at $1.2685 Looking Very Pivota

The technical picture has changed since then and becomes more bearish, although the price has been trading mostly sideways, with a bearish bias, for some days now.

My previous GBP/USD signal on 18^th July was not triggered because there were no rejections of any of my identified support or resistance levels.

Risk 0.75%.

Trades may only be taken 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 $1.2685 or $1.2640.
• 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 $1.2764, $1.2808, or $1.2881.
• 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 that the resistance at $1.3107 was likely to be pivotal that day. I thought that the best opportunity which might be set up would probably be on the long side if we had gotten two consecutive hourly closes during today’s London session above $1.3107.

This was a good call in a way, as we got one hourly close above $1.3107 before the price turned and quickly fell back below it, and then went on to fall much further quite quickly. So, I was correct about that level being pivotal.

The technical picture has changed since then and becomes more bearish, although the price has been trading mostly sideways, with a bearish bias, for some days now.

The technical feature which stands out is the bullish head and shoulders formation which can be seen in the price chart below, in which the two shoulders are held by the support level at $1.2685, and a neckline confluent with the key resistance level at $1.2808.

This suggests that if the price remains between these two levels, the longer-term direction is unclear. Yet a breakout or breakdown beyond these levels would indicate a more sustained price movement.

I see a long trade from another bullish bounce from $1.2685 or a strong breakout above $1.2808 today as good signals for new long trades, although I really doubt that the price will reach $1.2808 today.

Alternatively, a bearish breakdown below $1.2685, or a bearish reversal at $1.2808, should be good short trade entry opportunities.

There is nothing of high importance scheduled today concerning either the GBP or the USD.

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