GBP/USD Forex Signal: Bearish Consolidation Below $1.3154 -

GBP/USD Forex Signal: Bearish Consolidation Below $1.3154

Sep 03, 2024Jeremy ParkinsonFinance0

My previous GBP/USD signal on 7^th August produced a profitable short trade from the bearish inside bar which rejected the resistance level I had identified at $1.2727. Today’s GBP/USD Signals

Risk 0.75%.

Trades may only be taken before 5pm London time Wednesday.

Long Trade Ideas

Long entry following a bullish price action reversal on the H1 timeframe immediately upon the next touch of $1.3109, $1.3049, or $1.3029.

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 run.

Short Trade Ideas

Short entry following a bearish price action reversal on the H1 timeframe immediately upon the next touch of $1.3155, $1.3199, or $1.3221.

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 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 AnalysisI wrote in my previous GBP/USD prediction on 7^th August that the technical picture had become more bearish, so I was looking for a short trade from a reversal within the zone between $1.2726 and $1.2740. This was an excellent call as it produced a good, profitable trade.Over the past month since my previous forecast, the Pound rose strongly against the US Dollar to reach a new 1-year high above $1.3250, before falling back consistently over the past several days.Current market sentiment is weakly risk-off, with the US Dollar gaining after expectations of further US rate cuts beyond September dampened on stronger US economic data releases last week.The price is currently making a bearish consolidation below the resistance level at $1.3155. The support level at $1.3109 which is the lower boundary of this consolidation looks likely to be pivotal today, as if it breaks down, the price has a long way to fall before it meets a cluster of support levels, which are likely together to provide firmer support.Due to this sentiment and technical picture, I am ready to enter either a long trade from a bullish bounce off $1.3109 or a short trade following two consecutive lower hourly closes below that level. I have more faith in the short setup, so if the long trade is taken, it will probably be important to monitor it carefully and to be conservative in taking profit.There is nothing of high importance scheduled today concerning the GBP. Regarding the USD, there will be a release of ISM Manufacturing PMI data at 3pm London time.More By This Author:AUD/USD Forex Signal: Supported At $0.6750Weekly Forex Forecast – Sunday, Sept. 1Weekly Forex Forecast – Sunday, Aug. 18