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Price has moved little over the past week.
My previous GBP/USD signal on 16th March was triggered as none of the key support or resistance levels were reached that day.
Risk 0.75%.
Trades must be taken before 5pm London time today only.
- Long entry following a bullish price action reversal on the H1 timeframe immediately upon the next touch of $1.2167, $1.2127, or $1.2102.
- 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 entry following a bearish price action reversal on the H1 timeframe immediately upon the next touch of $1.2264 or $1.2290.
- 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.
I wrote in my previous forecast for the GBP/USD currency pair that the bullish vase looked quite strong, and an advance to the next resistance level at $1.2142 looked likely.
This was a good call, as the price did reach that level, but only following a dip and only on the next day.
The technical picture here remains bullish, but only weakly so. The line of least resistance is certainly upwards, as there is room to rise before reaching the nearest resistance level at $1.2264. There is a cluster of three closely packed support levels below the current price, all above the round number at $1.2100, and the price looks unlikely to be able to break down below all three of these today.
Turning to fundamentals, the US Dollar is in a long-term downwards trend, given tailwind by the ongoing banking crisis which is putting pressure on the Fed to cease hiking rates, or at least to make this week the final, small hike of the current cycle. The British Pound got a minor boost from last week’s UK budget forecasts, which see the UK as likely to escape the formerly-expected recession later this year, while inflation forecasts have also been slashed.
For these reasons, I will be happy to enter a new long trade if we get a bullish bounce at the nearest support level of $1.2167, targeting the resistance level at $1.2264.
There is nothing of high importance scheduled today concerning either the GBP or the USD.
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