GBP USD Forex Forecast Bullish Rebound

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GBP/USD Forex Signal Today 14/01: Bullish Rebound (Chart)

As we kick off the new year, the GBP/USD market is already presenting some intriguing opportunities for traders. In my previous forecast, I highlighted the importance of the support level at $1.2435, and it’s exciting to see that the price has indeed respected this mark. Today, we’re witnessing a bullish rebound, and I’ll outline the key signals and trade ideas to help you navigate this market.

Today’s GBP/USD Signals

Before we dive into the analysis, let’s take a look at the signals for today. We’re looking at a risk of 0.75%, and trades must be entered prior to 5 pm London time. Here are the long and short trade ideas:

Long Trade Ideas

• Go long following a bullish price action reversal on the H1 timeframe immediately upon the next touch of $1.2188, $1.2166, or $1.2096.
• 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

• Short entry following a bearish price action reversal on the H1 timeframe immediately upon the next touch of $1.2245, $1.2270, or $1.2324.
• 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.

GBP/USD Analysis

Last week, I predicted that the price would respect the new support level at $1.2435, and it’s great to see that the price has indeed risen strongly once it broke above that level. The technical and fundamental/sentimental pictures have become more bearish over the past week, although that may have changed over the last day or so.

Until yesterday, the price fell quite strongly, within the bearish price channel represented by the linear regression analysis shows within the price chart below. The price reached a new 1-year low below $1.2100, partly on US Dollar strength (the US Dollar index was making a new 2-year high at the time), and partly on bets against the British Pound which have emerged in the markets as the new British government’s fiscal projections are regarded with some incredulity by the capital markets, and the government plunges rapidly to very unpopular ratings in opinion polls.

Despite this bearish picture, we see a rebound from yesterday, partly due to the news that the incoming Trump administration may be prepared to implement tariffs on US important gradually rather than all at once, which weakened the Dollar a bit. The price has made a weak bullish breakout beyond the top of the descending price channel and now faces what looks likely to be a very pivotal resistance zone centered on $1.2250. If the price can get established above $1.2265 today, it will probably rise to $1.2324. However, so far we are seeing a bearish double top at $1.2265, so the price might remain below this level.

There is nothing of high importance due today concerning the GBP. Regarding the USD, there will be a release of PPI data today at 1:30 pm London time.

Key Takeaways

In summary, today’s GBP/USD signal is a bullish rebound, with a risk of 0.75%. The price has broken above the descending price channel and is now facing a pivotal resistance zone centered on $1.2250. If the price can get established above $1.2265, it will likely rise to $1.2324. However, the bearish double top at $1.2265 suggests that the price might remain below this level.

Conclusion

As we navigate the ever-changing landscape of the GBP/USD market, it’s essential to stay informed and adapt to new developments. Today’s bullish rebound presents an exciting opportunity for traders, and I hope this analysis has provided valuable insights to help you make informed trading decisions. Remember to always monitor the market closely and adjust your strategy accordingly. Happy trading!

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