GBP/USD Forex Signal: Pound Weakly Bearish


There is room to fall below $1.3319.

Last Wednesday’s GBP/USD signal produced a short trade from the intraday bearish reversal at $1.3473 which broke even.

Today’s GBP/USD Signals

Risk 0.75%.

Trades must be taken between 8am and 5pm London time today only.

  • Put the stop loss 1 pip above the local swing high.

  • Adjust the stop loss to break even once the trade is 20 pips in profit.

  • Take off 50% of the position as profit when the price reaches 20 pips in profit and leave the remainder of the position to run.

Long Trade Idea

  • Put the stop loss 1 pip below the local swing low.

  • Adjust the stop loss to break even once the trade is 20 pips in profit.

  • Take off 50% of the position as profit when the price reaches 20 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 last Wednesday that if UK inflation came in significantly above 3.9%, I expected the price to spike higher and quite possibly break above $1.3500, at least temporarily.

This was a good call as inflation came in at 4.2% and the price did rise and break above the nearest resistance level below $1.3500 and $1.3500 but only for a short while, before the price turned bearish again.

The Forex market has been dominated by strength in the US dollar and so the movement in this currency pair has naturally been lower over recent days. However, the pound was somewhat stronger than the euro so it held up a little better, but now seems to be as weak as the euro, although the falls in both currencies have begun to slow.

Overall, the technical picture looks weakly bearish, but the support level at $1.3319 looks likely to be significant, because there is no support below it for quite a long way. This means that $1.3319 is likely to be strongly defended by bulls, but if it does break down, there could then be a sharp bearish price movement.

I am prepared today to take a short trade if we get a bearish reversal at $1.3413, or if we get a New York close below $1.3319.

GBP/USD

Regarding the USD, there will be a release of Preliminary GDP data at 1:30pm London time, followed by the Core PCE Price Index at 3pm. There will then be a release of the FOMC Meeting Minutes at 7pm. There is nothing of high importance scheduled today regarding the GBP.



Read More: GBP/USD Forex Signal: Pound Weakly Bearish

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