Forex Analysis & Reviews: Trading recommendations for starters of EUR/USD and GBP/USD on July 7, 2021
time 07.07.2021 10:45 AM
time Relevance up to, 08.07.2021 09:31 AM

Here are the details of the economic calendar from July 6:

Yesterday, Europe released its data on the volume of retail sales, where there was an increase of 4.6% in May against the expected 4.4%.

* The volume of retail sales is one of the main economic indicators, which is an indicator of the change in sales volume in the context of retail trade. In simple words, this indicator reflects the purchasing power of the population.

The growth in the volume of retail sales is a positive signal for the economy, but judging by the trading schedule, no one looked at the statistics. Everyone played the information background.

What did the euro and the pound sterling react so strongly to?

The news appeared in the media that the UK plans to lift the restrictive measures imposed due to coronavirus infection from July 19. On the one hand, this is very positive news, if the situation with COVID-19 has normalized in the country, but, according to the statistics of the daily increase in new cases of infection, this suggests the opposite.

The UK Health Secretary Sajid Javid has warned that new cases of the coronavirus could rise to 100,000 a day over the summer. Moreover, the business is concerned that the existing restrictions will be replaced by recommendations that are not specified at the moment, and there are still a lot of questions to them.

The value of the pound sterling was rapidly declining due to fears, and we had a similar price movement due to the positive correlation with the Euro currency.

Positive correlation is a relationship between trading instruments, where one currency pair pulls another in the same direction.

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Analysis of trading charts from July 6:

The EUR/USD pair still managed to resume its downward movement after wobbling within the borders of 1.1835/1.1890 temporarily. It broke through the level of 1.1835 and headed towards a variable pivot point, namely the level of 1.1800.

The trading recommendation on July 6 considered trading on the breakdown of a particular border of the stagnation of 1.1835/1.1890. As a result, traders managed to open positions to sell euros.

The GBP/USD pair showed a fairly strong downward interest yesterday, where the control coordinates of 1.3835 were broken, which indicated an increase in the volume of short positions.

The trading recommendation on July 6 considered the possibility of opening sell positions if the price kept below the level of 1.3835, which ultimately brought a quite large profit.

Short positions or Short means positions to sell in anticipation of a decline in the value of the asset.

Trading recommendation for EUR/USD and GBP/USD on July 7, 2021

Today, the United States will release its data on the number of open vacancies in the JOLTS labor market, where they predict their growth by 9.388 thousand in May.

* The number of open vacancies in the labor market JOLTS is a monthly report on open vacancies in the commercial, industrial and office sectors of the United States. This report is prepared by the US Bureau of Labor Statistics, which is created on the basis of surveys of employers.

The increase in the number of open vacancies is a positive signal for the labor market and the economy as a whole. If unemployment does not increase at this moment, then the opposite effect will take place.

Looking at the EUR/USD trading chart, one can see the price rebound from the pivot area of 1.1800/1.1815, as if we have a logical basis from July 2, where similar price behavior was observed.

In order for the downward movement to acquire the most impressive price changes, the quote must hold below the level of 1.1800, which will open the way towards this year's base of 1.1700.

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As for the trading chart of the GBP/USD, it shows that the quote is moving in the pullback phase due to the high oversold level caused by the recent price decline.

It should be noted that the pullback stage is currently considered a local price change. If the volume of short positions begins to rise again, and the quote manages to stay below the level of 1.3770, a price movement towards 1.3730 is not excluded.

* An oversold market is when prices have fallen too low and very quickly. In this case, we are talking about the pound sterling, which weakened by more than 0.8% in a short period of time, which led to the oversold status. This status can lead to a local pullback, where they buy a cheaper currency.

  • Short positions or Short means positions to sell in anticipation of a decline in the value of the asset.

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Gven Podolsky,
Analytical expert of InstaForex
© 2007-2022
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