10.06.202613:09 Forex Analysis & Reviews: Level and Target Adjustments for the U.S. Session – June 10th

Next, we are expecting the release of U.S. Consumer Price Index (CPI) data and the Core CPI excluding food and energy prices. These are highly important indicators for the Federal Reserve and traders. Despite expectations of an increase, market reaction may be mixed. If the figures come in above forecasts, the dollar is likely to strengthen, giving traders confidence in further interest rate hikes by the Federal Reserve. However, if inflation comes in below expectations, it may raise concerns about slowing economic growth, which in turn could lead to a weakening of the U.S. dollar.

The key factor will not only be the absolute level of the indicators but also their dynamics compared to previous readings. A sustained acceleration in inflation will signal tighter monetary policy, supporting the dollar. Conversely, signs of slowing inflationary pressure may push the dollar lower, as the market begins to price in the possibility of future rate cuts.

In the case of strong data, I will rely on the Momentum strategy. If there is no clear market reaction to the data, I will continue using the Mean Reversion strategy.

Momentum Strategy (Breakout) for the Second Half of the Day:

For EUR/USD:

• Buy on a breakout above 1.1570, targeting 1.1600 and 1.1625;
• Sell on a breakout below 1.1540, targeting 1.1505 and 1.1480;

For GBP/USD:

• Buy on a breakout above 1.3405, targeting 1.3441 and 1.3478;
• Sell on a breakout below 1.3380, targeting 1.3360 and 1.3340;

For USD/JPY:

• Buy on a breakout above 160.60, targeting 160.90 and 161.17;
• Sell on a breakout below 160.30, targeting 160.02 and 159.80;

Mean Reversion Strategy (Reversion to the Mean) for the Second Half of the Day:

For EUR/USD:

• Look for sell opportunities after a false breakout above 1.1576, followed by a move back below this level;
• Look for buy opportunities after a false breakout below 1.1532, followed by a move back above this level;

For GBP/USD:

• Look for sell opportunities after a false breakout above 1.3415, followed by a move back below this level;
• Look for buy opportunities after a false breakout below 1.3360, followed by a move back above this level;

For AUD/USD:

• Look for sell opportunities after a false breakout above 0.7046, followed by a move back below this level;
• Look for buy opportunities after a false breakout below 0.6994, followed by a move back above this level;

For USD/CAD:

• Look for sell opportunities after a false breakout above 1.3960, followed by a move back below this level;
• Look for buy opportunities after a false breakout below 1.3900, followed by a move back above this level;