FX.co ★ Analysis and trading tips for GBP/USD on July 28 (US session)

Further decline became limited as the test of 1.2774 coincided with the sharp drop of the MACD line from zero. A similar situation happened with the test of 1.2822, but the market signal at that time pointed to buying.

Several important statistics from the US lie ahead. The Personal Consumption Expenditures (PCE) index will show the actual state of inflation in the region, while the data on changes in consumer spending and income levels will provide insights into whether real wages keep up with inflation or not. The University of Michigan Consumer Sentiment index, on the other hand, will demonstrate the overall consumer sentiment and their attitude towards the economy. Positive numbers on these indicators will likely exert pressure on euro, leading to a decline in the pair.

For long positions:

Buy when pound hits 1.2867 (green line on the chart) and take profit at the price of 1.2919 (thicker green line on the chart). Growth will occur amid weak statistics from the US. However, when buying, ensure that the MACD line lies above zero or rises from it.

Pound can also be bought after two consecutive price tests of 1.2828, but the MACD line should be in the oversold area as only by that will the market reverse to 1.2867 and 1.2919.

For short positions:

Sell when pound reaches 1.2828 (red line on the chart) and take profit at the price of 1.2764. Pressure may return in the case of strong reports. However, when selling, make sure that the MACD line lies below zero or drops down from it.

Pound can also be sold after two consecutive price tests of 1.2867, but the MACD line should be in the overbought area as only by that will the market reverse to 1.2828 and 1.2764.

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.