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Stuck in Mid-Term Flat Consolidation

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The pair is more bullish above 1.3800.

Last Wednesday’s GBP/USD signals were not triggered as there was no bearish price action when the price first reached the resistance level identified at 1.3690.

Today’s GBP/USD Signals

Risk 0.75%.

Trades must be entered prior to 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 there were a lot of support levels below the current price, so I doubted that the price would fall by much. I was right about that, but I also saw the potential upside as very likely to be capped at 1.3690, which was not correct, as the price broke through and beyond that level quite easily.

The technical picture is now less bearish than it was, but we have a very balanced and flat picture as shown in the price chart below. Bulls and bears are evenly matched. Furthermore, it is likely to be a very quiet day today as there is no scheduled high-impact news and it is a Monday, which is typically a quiet day of the week in the Forex market. The advantage of this dull situation is that these conditions may be good for scalpers to trade reversals off key levels which are likely to hold.

The price is very evenly balanced within a flat consolidation zone between 1.3794 and 1.3724. The price may well stay within this range today, but if we do get a sustained break above 1.3800 that could produce an exciting bullish breakout with lots of room to rise further.

I see the best approach today as likely to be looking for scalp trades from reversals at either 1.3794/1.3800 or 1.3724.

GBP/USD

There is nothing of high importance due today regarding either the GBP or the USD.



Read More: Stuck in Mid-Term Flat Consolidation

2021-07-26 14:42:10

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