There is wide consolidation between $1.2400 and $1.2600.
My last GBP/USD signal on 1st June was not triggered, as there was no bullish price action when the support level I had identified at $1.2553 was first reached.
Today’s GBP/USD Signals
Risk 0.75%.
Trades may only be taken before 5pm London time today.
- Long entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of $1.2437, $1,2412, or $1.2386.
- 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.
Short Trade Ideas
- Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of $1.2599 or $1.2629.
- 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.
GBP/USD Analysis
I wrote on 1st June that we saw the price topping out below the key resistance level at $1.2629.
The nearest support level sat at $1.2553, and I thought was likely to be quite strong, but if the price could get established below that level, it could drop quickly as far as $1.2450.
I was looking to take a short trade from $1.2629.
These were good calls, except I was wrong about the strength of the support level at $1.2553 – when it was reached, it broke down easily.
The technical picture now is one of a wide, somewhat choppy consolidation between roughly $1.24 and $1.26. In the absence of any major news items concerning these two currencies today, the price is likely to be most affected by any surprises which may emerge from the ECB’s release later today, or strong movement by the US Dollar.
I think the best approach to trading this currency pair today will be to look for scalping trades off extreme support or resistance levels such as $1.2437 or $1.2600, which should be monitored closely on a short time frame.
There is nothing of high importance scheduled today regarding either the GBP or the USD.