GBP/USD Signal: Consolidation Below $1.2715 Continues

My previous GBP/USD signal last Monday was not triggered as none of the support or resistance levels that I had identified were reached that day.
 

Today’s GBP/USD Signals

  • Risk 0.75%.
  • Trades must be taken before 5pm London time today.

(Click on image to enlarge)

GBP/USD Signal Today - 29/02: Below $1.2715 Steady (Graph)


Long Trade Idea

  • Long entry following a bullish price action reversal on the H1 timeframe immediately upon the next touch of $1.2558.
  • 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 ride.
     

Short Trade Ideas

  • Short entry following a bearish price action reversal on the H1 timeframe immediately upon the next touch of $1.2670, $1.2715, or $1.2786.
  • 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 ride.

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 in my previous forecast for the GBP/USD currency pair last Monday that the technical picture remained weakly bullish.

There was a clear pattern of higher lows which was bullish, but we also saw the price reject the $1.2715 area twice, giving a potentially bearish double top.

The technical picture has changed only a little, with the price remaining within its old consolidation zone below $1.2715. However, there are starting to be more bearish developments, such as new lower resistance levels below $1.2715, and more bearish price action.

The new resistance level at $1.2670 looks solid and could provide a good short trade entry if it is reached again.

However, traders should be cautious as the US PCE Price Index data which will be released once the New York session gets underway could push the price anywhere regardless of any technical considerations.

There is nothing of high importance scheduled today concerning the GBP. Regarding the USD, there will be a release of Core PCE Price Index data and US Unemployment Claims data at 1:30pm London time.


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