30.12.202512:01 Analisis Forex & Kajian: Level and Target Adjustments for the U.S. Session – December 30th

Given the low market volatility, it was not possible to implement anything using the Mean Reversion strategy. I also did not get any entry points using Momentum.

The lack of data from the euro area and the UK affected the volatility of the euro and the pound, keeping trading within a narrow sideways channel. Traders, already in a holiday mood, showed little activity, preferring to maintain a wait-and-see stance and avoid risky operations. Market volumes declined, and any attempts to break out of the established range were quickly suppressed. This relative stability, however, should not be misleading. In the second half of the day, we are expecting data on changes in the S&P/Case-Shiller Home Price Index for the 20 largest cities, as well as the Chicago PMI, which could provide the market with an impulse. The minutes of the Federal Reserve meeting will also be released. These events may act as catalysts, awakening markets from the pre-holiday lethargy.

The S&P/Case-Shiller Home Price Index will provide fresh information on the condition of the housing market, its dynamics, and resilience. An increase in the index may indicate that positive economic trends are being maintained, while a decline could point to potential problems and risks. The Chicago PMI, reflecting business activity in the region, will give insight into the state of the manufacturing sector. A reading above 50 signals expansion, while a value below this level indicates contraction.

However, the key event of the second half of the day will be the publication of the Fed meeting minutes. This document will allow market participants to take a closer look at the reasoning behind the regulator's latest decisions. Investors will be searching for hints about future monetary policy, assessing the Fed's readiness for further interest-rate cuts, and examining forecasts regarding inflation and economic growth.

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

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

EUR/USD

• Buy on a breakout above 1.1785, which could lead to euro growth toward 1.1810 and 1.1822;
• Sell on a breakout below 1.1765, which could lead to a decline toward 1.1754 and 1.1729.

GBP/USD

• Buy on a breakout above 1.3530, which could lead to pound growth toward 1.3561 and 1.3590;
• Sell on a breakout below 1.3500, which could lead to a decline toward 1.3470 and 1.3450.

USD/JPY

• Buy on a breakout above 156.10, which could lead to dollar growth toward 156.35 and 156.65;
• Sell on a breakout below 155.85, which could lead to dollar selling toward 155.60 and 155.32.

Mean Reversion Strategy for the Second Half of the Day:

EUR/USD

• Look for sales after a failed break above 1.1786 and a return below this level;
• Look for purchases after a failed break below 1.1763 and a return back above this level.

GBP/USD

• Look for sales after a failed break above 1.3525 and a return below this level;
• Look for purchases after a failed break below 1.3497 and a return back above this level.

AUD/USD

• Look for sales after a failed break above 0.6723 and a return below this level;
• Look for purchases after a failed break below 0.6702 and a return back above this level.

USD/CAD

• Look for sales after a failed break above 1.3694 and a return below this level;
• Look for purchases after a failed break below 1.3675 and a return back above this level.