22.05.202612:47 Forex Analysis & Reviews: Level and Target Adjustments for the U.S. Session – May 22

Today, trades in the euro and the pound were executed using the Mean Reversion strategy. I did not take any trades using the Momentum strategy.

Going forward, investors' and traders' attention will be focused on the release of several key U.S. macroeconomic reports. In particular, the University of Michigan Consumer Sentiment Index is expected, which serves as an important indicator of consumer confidence and, consequently, potential consumer demand. This index, which tracks households' perceptions of current and future economic conditions, may provide insight into consumers' willingness to make major purchases and investments.

At the same time, inflation expectations data will also be released. These figures are critically important for understanding how market participants and consumers assess future price levels. Elevated inflation expectations may signal a potential acceleration in inflation, which in turn could influence the Federal Reserve's monetary policy decisions.

In addition, significant attention will be paid to remarks by FOMC member Christopher Waller. His comments and assessment of the economic situation, as well as any signals regarding future Federal Reserve actions, could have a substantial impact on market sentiment and the dynamics of financial assets.

If the data comes in strong, I will rely on the Momentum strategy. If the market shows little reaction to the reports, I will continue using the Mean Reversion strategy.

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

EUR/USD

• Buying on a breakout above 1.1620 may lead to euro growth toward 1.1659 and 1.1698;
• Selling on a breakout below 1.1600 may lead to euro weakness toward 1.1585 and 1.1555;

GBP/USD

• Buying on a breakout above 1.3440 may lead to pound growth toward 1.3475 and 1.3499;
• Selling on a breakout below 1.3420 may lead to pound weakness toward 1.3380 and 1.3344;

USD/JPY

• Buying on a breakout above 159.13 may lead to dollar growth toward 159.39 and 159.60;
• Selling on a breakout below 158.85 may lead to dollar selling toward 158.57 and 158.28;

Mean Reversion Strategy for the Second Half of the Day

EUR/USD

• I will look for selling opportunities after a failed breakout above 1.1622 followed by a return below this level;
• I will look for buying opportunities after a failed breakout below 1.1595 followed by a return above this level;

GBP/USD

• I will look for selling opportunities after a failed breakout above 1.3438 followed by a return below this level;
• I will look for buying opportunities after a failed breakout below 1.3411 followed by a return above this level;

AUD/USD

• I will look for selling opportunities after a failed breakout above 0.7152 followed by a return below this level;
• I will look for buying opportunities after a failed breakout below 0.7122 followed by a return above this level;

USD/CAD

• I will look for selling opportunities after a failed breakout above 1.3800 followed by a return below this level;
• I will look for buying opportunities after a failed breakout below 1.3779 followed by a return above this level;