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26.07.2021 10:15 AM
Trading recommendations for starters of EUR/USD and GBP/USD on July 26, 2021

Here are the details of the economic calendar from July 23:

Last Friday, the United Kingdom released its retail sales data, where they recorded an increase by 0.5% in June, which is initially good. However, an increase of 0.7% was predicted.

The diverging expectations suggest that the UK economy is recovering much more slowly than expected.

The value of the pound sterling declined.

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

On July 23, preliminary data on business activity in Europe, Great Britain and the United States for July was released.

Details of statistics:

8:00 Universal time - The index of business activity in the services sector in Europe: prev. 58.3 pips; forecast 59.5 points; Fact. 60.4 pips

8:00 Universal time - The index of business activity in the manufacturing sector in Europe: prev. 63.4 pips; forecast 62.5 points; Fact. 62.6 pips.

Composite PMI for the EU was forecasted to rise from 59.5 points to 60.6 points.

European indicators came out better than expected, but the euro practically did not react to the statistics.

8:30 Universal time - Business activity in the UK services sector: prev. 62.4 pips; forecast 62.0 points; Fact. 57.8 pips

8:30 Universal time - PMI in the UK manufacturing sector: prev. 63.9 pips; forecast 62.7 points; Fact. 60.4 pips

Composite PMI for the UK was forecasted to fall from 62.2 points to 57.7 points.

The UK indicators came out worse than expected, so the pound was already moving on a downward course.

13:45 Universal time - The index of business activity in the US services sector: prev. 64.6 pips; forecast 64.8 points; Fact. 59.8 pips

13:45 Universal time - The index of business activity in the US manufacturing sector: prev. 62.1 pips; forecast 62.0 points; Fact. 63.1 pips

Composite PMI for the United States was expected to rise from 63.7 points to 59.7 points.

The American indicators came out not as good as many wanted, but at the same time, the composite index reflects us a quite strong decline.

• The index of business activity in the service sector is an indicator that is determined on the basis of a survey of managers of companies operating in the service sector in order to assess the current situation in this sector, as well as the possible prospects.

An index above 50 points indicates a positive situation, while an index below 50 points signals a worsening situation in the service sector.

• Manufacturing PMI is an indicator of changes in business conditions in the manufacturing sector during the reporting month. The index is calculated based on monthly surveys of purchasing managers working in private companies in the manufacturing sector.

An index above 50 points indicates a positive situation, while a reading below 50 indicates a worsening situation in the manufacturing sector.

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Analysis of trading charts from July 23:

The EUR/USD pair ended the previous week in the previously set price range of 1.1750/1.1830 in the market, focusing within its lower border.

The process of accumulation of trading forces has been delayed for more than 100 hours, which can lead to new speculative jumps in the market.

The trading recommendation on July 23 considered the strategy of price exit from the established range, where the entry into the trading position would be carried out once the price is kept beyond the range of a particular border in the H4 time frame.

* The accumulation process is a price fluctuation in a closed amplitude, where at the moment of breakdown of a particular stagnation boundary, a local acceleration in the direction of breakdown often occurs.

The GBP/USD pair encountered the interaction area of trade forces at 1.3750/1.3800 when it was forming a correction. Here, a decrease in the volume of long positions and an increase in the volume of short positions were observed.

To simply put it, the corrective move entered the completion phase, using the price area of 1.3750/1.3800 as a resistance.

The trading recommendation on July 23 considered the scenario of the price rebound from the 1.3750/1.3800 area, where the price holding below the level of 1.3725 indicates the sellers' return to the market.

• Short positions or Short means sell positions

• Long positions or Long means buy positions.

July 26 economic calendar:

There is only one data to be released today, namely the US new homes sales, where an increase of 1.4% is expected. This is quite a lot, which can encourage traders to buy the US dollar.

14:00 Universal Time - New Home sales in the US

New home sales reflect the volume of new home sales in the United States in monetary terms in the reporting month. The analysis takes data on sold single-family homes, this statistics does not include apartment buildings. Also, houses built by the owners of land plots and houses built for rent are excluded from the assessment.

The report is prepared by the US National Association of Realtors.

High rates of new home sales may lead to a strengthening of the national currency - USD.

Trading recommendation for EUR/USD on July 26, 2021

Looking at the EUR/USD trading chart, one can see that the quote still follows within the range of 1.1750/1.1830, where the lower border serves as a support level.

In this situation, the trading tactics are focused on the out-of-range momentum, which is likely to indicate a subsequent price movement in the market.

Now, let's concretizing trading signals:

Sell positions:

Traders will consider this if the price is kept below the level of 1.1750, in the direction of 1.1700.

Buy positions:

Traders will consider this if the price is kept above the level of 1.1830, in the direction of 1.1900.

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Trading recommendation for GBP/USD on July 26, 2021

As for the trading chart of the GBP/USD, it can be seen that the interaction area of trading forces in the levels of 1.3750/1.3800 still puts pressure on buyers, but entering the market along a downward course will be made after the price is kept below the level of 1.3725 in an H4 time frame. Otherwise, we may take a prolonged movement along the interaction area of trade forces.

Sell positions:

Traders will consider this if the price is kept below the level of 1.3725, which will open the way towards the coordinates 1.3700, 1.3640, and 1.3570.

Buy positions:

Traders will consider this if the price is kept above the level of 1.3800, in the direction of 1.3900.

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What is reflected in the trading charts?

A candlestick chart view is graphical rectangles of white and black light, with sticks on top and bottom. When analyzing each individual candle in detail, you will see its characteristics of a relative time period: the opening price, the closing price, the maximum and minimum prices.

Horizontal levels are price coordinates, relative to which a stop or a price reversal may occur. These levels are called support and resistance in the market.

Circles and rectangles are highlighted examples where the price of the story unfolded. This color selection indicates horizontal lines that may put pressure on the quote in the future.

The up/down arrows are the reference points of the possible price direction in the future.

Golden Rule: It is necessary to figure out what you are dealing with before starting to trade with real money. Learning to trade is so important for a novice trader since the market will exist tomorrow, next week, next year, and the next decade.

Gven Podolsky,
Analytical expert of InstaForex
© 2007-2024
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