GBP/USD Forex Signal: Strongly Bearish – 08 March 2022
The price is hitting new 15-month lows.
My GBP/USD signal last Thursday was not triggered, as the price did not hit any of the key levels identified during the London session that day.
Today’s GBP/USD Signals
Trades may only be entered between 8am and 5pm London time today.
Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of $1.3079 or $1.3005.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 Idea
Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of $1.3141.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.
I wrote last Thursday that we were seeing a clear and flat wide-ranging consolidation between $1.3458 and $1.3273. I thought it was very likely that the price would remain within this range over the day and that it may be worthwhile entering a trade from a bearish reversal very close to $1.3458 even if the level was not quite reached – the half number at $1.3450 could also be good.
This was a very good call as the price has fallen strongly ever since that day’s high, as non-safe haven European currencies such as the British Pound and the Euro continue to get hammered over the war in Ukraine, partly due to the economic fallout over the sanctions against Russia and energy supply issues, and partly due to the fear of a full-scale war in Europe between NATO and Russia breaking out. This saw the price fall yesterday to a new 15-month low, along with the EUR/USD currency pair.
It is very hard to see how this pair could have a meaningful up day unless there was a realistic prospect of a peace agreement emerging, which seems very unlikely. Russia demanded yesterday that Ukraine agree to severe limitations on its sovereignty and the Ukrainian government is in no mood to accept such dictates. Similar limitations were successfully imposed on Finland in the wake of World War two by the Soviet Union, but the situation with Ukraine is quite different.
For these reasons, I see another down day or a consolidation as by far the most likely outcomes for this pair, so any long trades taken should only be scalps, while the best opportunities are likely to be short trades. A bearish reversal from the resistance level at $1.3141 would be an ideal setup for a short trade entry.
There is nothing of high importance due today concerning either the GBP or the USD.