26.06.202612:45 Forex Analysis & Reviews: Level and Target Adjustments for the U.S. Session – June 26th

Today, the euro trade was executed using the Momentum strategy, while I did not take any trades based on the Mean Reversion strategy.

A busy economic calendar is expected ahead, which may have a significant impact on the currency market. Traders and investors should closely monitor the release of key economic data that could set the tone for trading in the coming period. The first report to attract attention will be the updated U.S. international trade in goods balance. This indicator reflects the difference between the value of exported and imported goods. Deviations from forecasts may signal changes in the competitiveness of U.S. products in global markets and could affect the U.S. dollar.

The release of the University of Michigan Consumer Sentiment Index will also be important. This is a leading indicator, as it reflects households' expectations regarding future economic conditions, personal income, and inflation. At the same time, inflation expectations data will be published. Consumers' assessments of future inflation play an important role in shaping Federal Reserve policy. Rising inflation expectations could strengthen the case for a more restrictive monetary policy, a topic that has been widely discussed recently.

Additional attention will be focused on speeches by FOMC members John Williams and Neel Kashkari. Their comments on current economic conditions, inflation prospects, and future monetary policy may contain important signals for the markets, potentially leading to a stronger U.S. dollar. If their stance is dovish, the euro and the pound could quickly extend their gains from the morning session.

In the event of strong economic data, I will rely on the Momentum strategy. If the market shows little or no reaction to the releases, I will continue using the Mean Reversion strategy.

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

For EUR/USD

• A breakout above 1.1411 may lead to a rise in the euro toward 1.1436 and 1.1459;
• A breakout below 1.1385 may lead to a decline in the euro toward 1.1356 and 1.1327;

For GBP/USD

• A breakout above 1.3244 may lead to a rise in the pound toward 1.3270 and 1.3297;
• A breakout below 1.3209 may lead to a decline in the pound toward 1.3181 and 1.3150;

For USD/JPY

• A breakout above 161.83 may lead to a rise in the dollar toward 162.04 and 162.24;
• A breakout below 161.55 may trigger a sell-off in the dollar toward 161.33 and 161.10;

Mean Reversion Strategy (Fade/Reversal Trading) for the Second Half of the Day:

For EUR/USD

• I will look for short positions after a failed breakout above 1.1427 followed by a return below this level;
• I will look for long positions after a failed breakout below 1.1377 followed by a return above this level;

For GBP/USD

• I will look for short positions after a failed breakout above 1.3245 followed by a return below this level;
• I will look for long positions after a failed breakout below 1.3192 followed by a return above this level;

For AUD/USD

• I will look for short positions after a failed breakout above 0.6915 followed by a return below this level;
• I will look for long positions after a failed breakout below 0.6886 followed by a return above this level;

For USD/CAD

• I will look for short positions after a failed breakout above 1.4201 followed by a return below this level;
• I will look for long positions after a failed breakout below 1.4170 followed by a return above this level.