August 3, 2022
  • August 3, 2022

GBP / USD Forex Signal: Bearish Below 1.3700

By on September 22, 2021 0

The GBP is getting relatively weaker.

Last Monday’s GBP / USD signal was not triggered as there was no bullish price action when the support level identified at 1.3674 was first reached that day.

Today’s GBP / USD Signals

Risk 0.75%.

Transactions can only be completed between 8:00 a.m. and 5:00 p.m. London time today.

  • Short entry following a bearish reversal in the H1 period immediately after the next contact of 1.3699, 1.3721 or 1.3765.

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

  • Move the stop loss to break even once the trade is 20 pips of profit.

  • Take 50% of the position as profit when the price reaches 20 pips of profit and let the rest of the position surf.

Long business ideas

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

  • Move the stop loss to break even once the trade is 20 pips of profit.

  • Take out 50% of the position as profit when the price reaches 20 pips of profit and let the rest of the position surf.

The best method to identify a classic “price action reversal” is to close an hourly candle, such as a pin bar, doji, outside candle, or even just a engulfing candle with a higher close. You can mine these levels or areas by observing the price action that occurs at the given levels.

GBP / USD Analysis

I wrote last Monday that the bearish technical environment with the price breaking sharply to new lows suggested that short trades have a higher probability of success provided the price stays below the resistance level closest to 1.3721. It was a good call as the price stayed below 1.3721 all day and went down during the day.

The technical picture has changed little since last Monday, with the situation still looks bearish, and maybe a bit more as the GBP and EUR now look weaker than the commodity currencies. The USD is still rising, and we still have a broadly risk-free market environment, so there seems to be every reason to be bearish on this currency pair today.

Support starts at 1.3588 and there are several support levels placed nearby below so I suspect that the price will struggle to drop below 1.3588 for a while.

I see the next directional price move as likely to be bearish but of course that can change in an instant when the FOMC release arrives later. Ahead of the release, I see the best opportunities here as likely to be short trades at or below 1.3700 short term with prudent profit targets.

Regarding the USD, there will be releases of the FOMC statement, federal funds rate and economic projections at 7 p.m. London time, followed by the usual press conference half an hour later. There is nothing very significant expected today regarding the GBP.