The GBP/USD signal from November 5th didn’t actually trigger. I had strong reasons for my bearish outlook, yet it turned out to be a poor choice.
GBP/USD today’s signal
The risk level is set at 0.75%.
Trades should be made by 5 PM Tokyo time on Wednesday.
Long trade ideas
- After spotting a bullish price reversal in the H1 timeframe, consider entering a long trade right after the next touches at $1.3070 or $1.3038.
- Place your stop loss 1 pip below your local swing low.
- Adjust your stop loss to break even once the trade shows a profit of 25 pips.
- Take 50% of the position as profit when the price hits 25 pips, and keep the rest of the position intact.
Short trade ideas
- Enter a short position right after the next touches at $1.3128, $1.3164, or $1.3185, if the bearish price action shows a reversal in the H1 timeframe.
- Set your stop loss 1 pip above your local swing high.
- Like with long trades, adjust your stop loss to break even at 25 pips in profit.
- Again, take 50% of the position as profit at 25 pips and hold the remainder.
A classic “price reversal” can often be identified by the closing of an hourly candlestick, like a pin bar, doji, or an engulfing candlestick that has a higher closing price. Monitoring these levels can help to identify profitable opportunities.
GBP/USD analysis
Now, the technical landscape appears more bullish, though some bearish elements remain. There’s lingering bullish sentiment around the US dollar, but expectations for a rate cut at the upcoming December Fed meeting are currently over 80%, which impacts the price against the US dollar. Recent dollar strength mostly stemmed from reduced anticipation for a December interest rate cut.
Clearly, there’s strong resistance at $1.3128 that’s currently holding its ground. If the price manages to breach this level, it could signal further bullish movement, potentially reaching $1.3164. However, caution is advised with long trades due to closely positioned resistance levels and recent volatility in those areas.
Overall, the technical setup seems more favorable for short-term longs above $1.3128 following what’s likely to be a retest at that point turning into new support.
On the economic front, there are no significant plans for the Pound, while PPI and retail sales data for the US dollar are set to be released at 1:30 PM.
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