GBP/USD Forex Signal: Strong Bullish Reversal from 37-Year Low – 13 September 2022
Ascending price channel continues to hold.
My previous GBP/USD signal on 5th September was not triggered, as there was no bearish price action when the price first reached the resistance level which I had identified at $1.1496.
Today’s GBP/USD Signals
Trades may only be entered prior to 5pm London time today.
Long trade ideas
Long entry following a bullish price action reversal on the H1 timeframe immediately upon the next touch of $1.1649, $1.1602, or $1.1556.Put the stop loss 1 pip below the local swing low.Adjust the stop loss to break even once the trade is 25 pips in profit.Take off 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
Go short following a bearish price action reversal on the H1 timeframe immediately upon the next touch of $1.1758 or $1.1878.Put the stop loss 1 pip above the local swing high.Adjust the stop loss to break even once the trade is 25 pips in profit.Take off 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.
I wrote in my previous forecast on Monday last week that the price was trading at a near 2.5-year low and showing very strong bearish momentum. I noted that bears might find obstacles from the lower trend line of the descending price channel, and from another test of the 37-year low price at $1.1409.
I was correct, eventually, about both – the price rejected the lower trend line and then rose to make a strong up day. Then some days later, the price tested the 37-year low at $1.1409 and strongly rejected it and has been rising in a new shorter-term ascending price channel ever since.
This more bullish picture has been supported by a weakening US Dollar. However, we will get a release of very crucial US CPI (inflation) data today, which could dramatically change sentiment on the greenback if the number deviates strongly enough from expectations to be a major surprise.
If the US CPI release later today is no surprise, I will look for a long trade from either $1.1649, or even better, from the support level at $1.1602 which looks likely to be very strong as it is confluent with both the round number at $1.1600 and with the lower trend line of the ascending channel – scalpers should definitely watch out for the price to touch this lower level as there should be a high-probability long scalp awaiting at this level if it is reached.
Concerning the USD, there will be a release of CPI (inflation) data at 1:30pm London time. There is nothing of high importance due today regarding the GBP.
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