Economic calendar details for July 29
The preliminary data on US GDP for the second quarter was released on Thursday, July 29, which recorded an increase of 6.5% on an annualized basis. At first glance, everything is fine, the growth rate of the American economy accelerated from 6.4% to 6.5%, but growth was expected at 8.6%.
In simple terms, the US economy is recovering at a slower pace, this is not the best signal for investors, which led to a further weakening of dollar positions.
Along with the GDP, the data on applications for unemployment benefits in the United States was also published, where they predicted a reduction in their volume, but in the end, the labor market indicators upset traders.
Details of statistical data:
The volume of initial claims for benefits decreased from 424,000 to 400,000, despite the fact that the previous data was revised for the worse, from 419,000 to 424,000, and the forecast for current indicators was 380,000.
The volume of continuing claims for benefits increased from 3.262 million to 3.269 million, with the forecast of a decrease in their volume to 3.196 million.
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• Claims for unemployment benefits reflect the number of citizens who are not currently working and receiving unemployment benefits. This indicator is considered the state of the labor market, where the growth of the indicator negatively affects the level of consumption and economic growth. The reduction in claims for benefits has a positive effect on the labor market.
Analysis of trading charts from July 29
The Euro/Dollar currency pair managed to keep the given corrective course on the market, as a result of which the quotes rushed to the subsequent resistance level at 1.1900.
The resistance level of 1.1900 was plotted on the July 6-12 chart, where long positions contracted.
The trading plan of July 29 considered the prolongation of the upward movement previously set in the market towards the level of 1.1900. At the same time, the trading plan took into account the possibility of a reduction in the volume of long positions, indicating a rebound in price.
The Pound/Dollar currency pair has almost a similar plot, where the upward cycle was prolonged, and the quotes headed towards the subsequent resistance level at 1.4000, where there was a natural reduction in the volume of long positions.
The trading plan from July 29 took into account the possibility of a further upward movement, where the psychological resistance level at 1.4000 was highlighted.
In simple terms, the forecast of an upward movement towards the level of 1.4000, followed by a rebound from it, was predicted using technical analysis.
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• Long positions, or Long (Long), means buy positions. In our case, we have a reduction in buy positions, which leads to a slowdown and a reversal of the euro rate.
• Psychological levels are round values (1,2000,1,3000, 1,4000,1,5000, etc.) that serve as key coordinates in the market that traders pay special attention to. These levels are often used as support or resistance.
Economic calendar for July 30
Today, in terms of the economic calendar, we have preliminary data on inflation in Europe, where it is predicted that consumer prices will rise from 1.9% to 2.0%.
Given the growth of the European currency over the past days, inflation indicators could have already been taken into account in the quotes.
Inflation in the EU - 09:00 UTC
We study and analyze
• The consumer price index is prepared by Eurostat, which determines the change in prices of a selected basket of goods and services for a given period. This indicator is considered a key indicator for assessing inflation. From the point of view of fundamental analysis, the rise in inflation is a positive signal for the national currency, but when consumer prices rise faster than forecasted, it is not considered the best signal.
Trading plan - EURO/DOLLAR for July 30
Analyzing the current Euro/Dollar trading chart, you can see that the resistance level at 1.1900 puts pressure on buyers, which leads to a slowdown and a rebound in the price.
In this situation, traders consider two possible scenarios of price development at once:
The first plot proceeds from the natural basis of the past, associated with the resistance level of 1.1900, which contributes to the increase in the volume of short positions.
In simple terms, traders are looking at a rebound from 1.1900 towards 1.1830.
The second plot assumes that the correction from the pivot point 1.1750 will remain relevant in the market and after a short stagnation along the 1.1900 level, it will still be broken by the price along an upward trajectory. For the trading scenario to coincide on the market, the quotes must hold higher than 1.1915 in a four-hour period, this will open the way in the direction of 1.1950-1.1975.
Trading Plan - Pound/Dollar for July 30
Analyzing the current Pound/Dollar trading chart, you can see that the area of the psychological level of 1.4000 acts as a resistance in the market, which leads to a slowdown and a rebound in the price. The logical basis of the past associated with this level can play into the hands of sellers, which will lead to an increase in the volume of short positions.
In simple terms, the rebound stage may well lead to a downward move towards the 1.3900 level.
An alternative scenario for the development of the market will be considered by traders if the price is kept above 1.4050 in the daily period. In this case, the chances of buyers will increase to return the quotes to the area of the local high of the medium-term upward trend.
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. In a detailed analysis of each candlestick, you will see its characteristics relative to a particular time period: open price, close price, high and low prices.
Horizontal levels are price coordinates, relative to which a stop or price reversal may occur. In the market, these levels are called support and resistance.
Circles and rectangles are highlighted examples where the price of history has reversed. This highlighting in color indicates horizontal lines that may put pressure on the quotes in the future.
The up/down arrows are indications of the possible direction of the price in the future.
IMPORTANT TO REMEMBER
The golden rule: before you start trading with real money, you need to figure out what you are dealing with. That is why learning to trade is so important for a novice trader, and the market will exist tomorrow, next week, next year, and the next decade.