The US Dollar is likely to be the key price driver today.
My last GBP/USD signal on Monday was not triggered, as none of the key levels identified were reached that day.
Today’s GBP/USD Signals
Trades must be taken before 5pm London time today only.
Long entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of $1.2437 or $1.2412.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 $1.2624 or $1.2698.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 last Monday that the Dollar decline would continue at least until the FOMC Meeting Minutes are released on Wednesday.
This was a good and accurate call.
The Dollar is now firmer since last night’s FOMC minutes, which showed the Fed is likely to hike rates by 0.5% in both June and July, but only mildly. Nevertheless, as the US Dollar is in a bullish long-term trend, its rise could begin to accelerate.
Much will now likely depend on today’s upcoming release of Advance US GDP data, which is expected to show the US economy is contracting. However, the interpretation the markets will put on any surprise is not clear, although it can be argued that worse than expected data could weaken the Dollar as it might damage the Fed’s resolve to raise interest rates strongly.
The technical picture is quite clear – a relatively wide consolidation between $1.2624 and $1.2437.
I see the best strategy for this currency pair today as waiting for the Advance GDP data and fading any post-release spike to either level.
Regarding the USD, there will be a release of Advance GDP data at 1:30pm London time. There is nothing of high importance scheduled for today concerning the GBP.