FX.co ★ Analysis and trading tips for GBP/USD on July 31

Analysis of transactions and tips for trading GBP/USD

Further growth became limited as the first test of 1.2867, which happened on Friday afternoon, coincided with the sharp rise of the MACD line from zero. The second test, on the other hand, occurred when the MACD slid from the overbought zone, which provided an ideal selling signal that resulted in a price decrease of around 30 pips.

A series of reports related to changes in the UK's M4 money supply, number of approved applications for mortgage credit, and volume of net lending to individuals will come out during the European session. An increase in lending data may help pound continue its upward correction.

For long positions:

Buy when pound hits 1.2877 (green line on the chart) and take profit at the price of 1.2919 (thicker green line on the chart). Growth will occur in case of very good UK statistics. 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 1.2841, but the MACD line should be in the oversold area as only by that will the market reverse to 1.2877 and 1.2919.

For short positions:

Sell when pound reaches 1.2841 (red line on the chart) and take profit at the price of 1.2805. Pressure will return in case of poor reports and an unsuccessful attempt to break above the daily high. However, when selling, ensure that the MACD line lies below zero or drops down from it.

Pound can also be sold after two consecutive price tests of 1.2877, but the MACD line should be in the overbought area as only by that will the market reverse to 1.2841 and 1.2805.

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.