FX.co ★ Analysis and trading tips for GBP/USD on July 7

Analysis of transactions and tips for trading GBP/USD

Further decline became limited as the test of 1.2730 coincided with the significant drop of the MACD line from zero. And since the pair failed to reach 1.2674, no new market signals appeared.

Data on the UK's construction sector PMI supported pound, but everything changed after strong reports on the labor market and service sector in the US. The numbers led to the sharp strengthening of dollar demand, resulting in a decline in GBP/USD.

The UK house price index report lies ahead, but it will not affect the market at all. Perhaps, there may be some movement during the speech of Bank of England MPC member Catherine L. Mann.

For long positions:

Buy when pound hits 1.2762 (green line on the chart) and take profit at the price of 1.2801 (thicker green line on the chart). However, strong growth may not occur today.

When buying, make sure that the MACD line lies above zero or rises from it. Euro can also be bought after two consecutive price tests of 1.2733, but the MACD line should be in the oversold area as only by that will the market reverse to 1.2762 and 1.2801.

For short positions:

Sell when pound reaches 1.2733 (red line on the chart) and take profit at the price of 1.2680. Pressure will increase, but the downward movement will be limited by US reports.

When selling, traders should make sure that the MACD line lies below zero or drops down from it. Euro can also be sold after two consecutive price tests of 1.2762, but the MACD line should be in the overbought area as only by that will the market reverse to 1.2733 and 1.2680.

What's on the chart:

Thin green line - entry price at which you can buy GBP/USD

Thick green line - estimated price where you can set Take-Profit (TP) or manually fix profits, as further growth above this level is unlikely.

Thin red line - entry price at which you can sell GBP/USD

Thick red line - estimated price where you can set Take-Profit (TP) or manually fix profits, as further decline below this level is unlikely.

MACD line- it is important to be guided by overbought and oversold areas when entering the market

Important: Novice traders need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp fluctuations in the rate. If you decide to trade during the release of news, then always place stop orders to minimize losses. Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes.

And remember that for successful trading, you need to have a clear trading plan. Spontaneous trading decision based on the current market situation is an inherently losing strategy for an intraday trader.