02.04.202613:14 Forex Analysis & Reviews: Level and Target Adjustments for the U.S. Session – April 2nd

Only the British pound could be traded in the first half of the day using the Mean Reversion strategy, but a proper upward reversal never materialized. I did not take any trades using Momentum.

The lack of active buyers in the euro is quite understandable—especially after Trump's recent statements about a continued war with Iran. Amid escalating geopolitical tensions and economic challenges, the single European currency is under significant pressure, reflecting traders' caution and uncertainty about future prospects. Any statements pointing to increased confrontation will inevitably lead to further capital outflows from risk assets in favor of the U.S. dollar.

Weak Italian retail sales, reported this morning, are also a worrying signal for the entire eurozone. Italy, as one of the region's largest economies, plays a key role in maintaining overall economic balance. A decline in consumer activity in the country indicates potential underlying problems that could spread to other member states.

In the second half of the day, we are only expecting data on weekly initial jobless claims and the U.S. trade balance. Although these macroeconomic indicators are not among the most significant, they still have the potential to influence market sentiment. Weekly initial jobless claims are a sensitive barometer of labor market conditions. A sharp decline in this indicator would signal continued strengthening in employment, which in turn supports consumer spending and overall economic growth. Positive unemployment data typically increases expectations of tighter future monetary policy by the Federal Reserve. However, given that strong ADP data was ignored yesterday, today's weekly report is unlikely to change much.

In the case of strong data, I will rely on the Momentum strategy. If there is no 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

• Buying on a breakout above 1.1535 may lead to growth toward 1.1560 and 1.1590;
• Selling on a breakout below 1.1515 may lead to a decline toward 1.1485 and 1.1445;

For GBP/USD

• Buying on a breakout above 1.3210 may lead to growth toward 1.3235 and 1.3260;
• Selling on a breakout below 1.3185 may lead to a decline toward 1.3160 and 1.3131;

For USD/JPY

• Buying on a breakout above 159.75 may lead to growth toward 159.95 and 160.20;
• Selling on a breakout below 159.50 may lead to declines toward 159.30 and 159.10;

Mean Reversion Strategy (pullback) for the second half of the day:

For EUR/USD

• I will look for selling opportunities after a false breakout above 1.1542 and a return below this level;
• I will look for buying opportunities after a false breakout below 1.1496 and a return to this level;

For GBP/USD

• I will look for selling opportunities after a false breakout above 1.3226 and a return below this level;
• I will look for buying opportunities after a false breakout below 1.3178 and a return to this level;

For AUD/USD

• I will look for selling opportunities after a false breakout above 0.6890 and a return below this level;
• I will look for buying opportunities after a false breakout below 0.6861 and a return to this level;

For USD/CAD

• I will look for selling opportunities after a false breakout above 1.3928 and a return below this level;
• I will look for buying opportunities after a false breakout below 1.3905 and a return to this level.