Current trend

After a decline at the beginning of the month, the GBP/USD pair is falling amid unstable dynamics of the American currency and is trading at 1.2773.

Stable macroeconomic statistics support the pound. The composite PMI rose from 52.3 points to 52.8 points, while the service PMI rose from 52.1 points to 52.5 points. Compared to the preliminary data published at the end of July, there is an increase of 0.1% for each, reflecting a gradual recovery, which may support the currency soon. The retail sales index from the British Retail Consortium (BRC), which considers the dynamics of sales of goods in stores opened at least a year ago based on information they regularly provide, increased in July from –0.5% to 0.3%, meeting forecasts.

The American dollar is trading at 102.60 in USDX. The July service PMI was 55.0 points, down from 55.3 points earlier, offset by the consolidated indicator from the Institute for Supply Management (ISM) growth from 48.8 points to 51.4 points and returned to the green zone. No key publications are expected on the US market today, and the current trend may continue until the middle of the week.

Support and resistance

On the daily chart, the trading instrument is approaching the support line of the ascending channel 1.3050–1.2770.

Technical indicators are turning down: fast EMA on the Alligator indicator crossed the signal line downwards, and the AO histogram is forming correction bars, falling into the sell zone.

Resistance levels: 1.2800, 1.2940.

Support levels: 1.2740, 1.2610.

Trading tips

Short positions may be opened after the price declines and consolidates below 1.2740, with the target at 1.2610. Stop loss — 1.2810. Implementation period: 7 days or more.

Long positions may be opened after the price grows and consolidates above 1.2800, with the target at 1.2940. Stop loss — 1.2750.