02.12.202513:06 Analisis Forex & Kajian: Level and Target Adjustments for the U.S. Session – December 2nd

Only the euro was traded today using the Mean Reversion scenario, although even there no strong reversal movement occurred. I did not trade anything using the Momentum approach.

Inflation data in the eurozone for November matched economists' forecasts, which resulted in very low market volatility in EUR/USD. However, the unemployment rate came in slightly above expectations. This confirms that the European Central Bank still has no strong reasons to change its accommodative monetary policy. Consumer prices in the eurozone rose by 2.1% year-on-year, in line with expectations and not significantly deviating from the ECB's target.

The British pound showed a small spike in volatility following news that UK housing prices rose for the third consecutive month. The average house price increased by 0.3% in November, slightly higher than the 0.1% rise in October.

Later today, only a speech by FOMC member Michelle Bowman is expected, who is unlikely to address monetary policy, along with the RCM/TIPP U.S. Economic Optimism Index. Markets will certainly pay attention to every word from the Federal Reserve representative, but given the preliminary agenda, significant fluctuations in financial markets are not expected. Bowman's speech will most likely focus on broader economic topics and possibly financial stability rather than specific details on future monetary policy actions. The RCM/TIPP Economic Optimism Index, meanwhile, will provide some insight into consumer and investor sentiment in the U.S. Data exceeding expectations could offer short-term support to the U.S. dollar by reflecting increased confidence in economic growth.

If the statistics turn out strong, I will rely on implementing the Momentum strategy. If there is no market reaction to the data, I will continue using the Mean Reversion strategy.

Momentum Strategy (breakout trades) for the second half of the day:

For EUR/USD

• Buying on a breakout above 1.1623 may lead to euro growth toward 1.1651 and 1.1678
• Selling on a breakout below 1.1600 may lead to euro decline toward 1.1560 and 1.1530

For GBP/USD

• Buying on a breakout above 1.3215 may lead to pound growth toward 1.3240 and 1.3265
• Selling on a breakout below 1.3180 may lead to pound decline toward 1.3165 and 1.3145

For USD/JPY

• Buying on a breakout above 156.12 may lead to dollar growth toward 156.55 and 156.94
• Selling on a breakout below 155.90 may lead to dollar decline toward 155.70 and 155.41

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

For EUR/USD

• I will look for sell trades after a failed breakout above 1.1620 followed by a move back below this level
• I will look for buy trades after a failed breakout below 1.1595 followed by a return back above this level

For GBP/USD

• I will look for sell trades after a failed breakout above 1.3226 followed by a move back below this level
• I will look for buy trades after a failed breakout below 1.3198 followed by a return back above this level

For AUD/USD

• I will look for sell trades after a failed breakout above 0.6561 followed by a move back below this level
• I will look for buy trades after a failed breakout below 0.6540 followed by a return back above this level

For USD/CAD

• I will look for sell trades after a failed breakout above 1.4014 followed by a move back below this level
• I will look for buy trades after a failed breakout below 1.3990 followed by a return back above this level